Consider the Following Three Investment Opportunities

question 94

Essay

Consider the following three investment opportunities:
Project I would require an immediate cash outlay of $10,000 and would result in cash savings of $3,000 each year for 5 years.
Project II would require cash outlays of $3,000 per year and would provide a cash inflow of $30,000 at the end of 5 years.
Project III would require a cash outlay of $10,000 now and would provide a cash inflow of $30,000 at the end of 5 years.
Required:
The discount rate is 14%. Use the net present value method to determine which, if any, of the three projects is acceptable.

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Definitions:

Palisade Mesophyll

A layer of closely packed photosynthetic cells under the epidermis in leaves, responsible for the absorption of light necessary for photosynthesis.

Spongy Mesophyll

A layer of loosely arranged cells in a plant leaf, facilitating gas exchange and containing chloroplasts for photosynthesis.

Cuticle

A protective and waxy or hard layer covering the epidermis of plants, insects, and some other organisms.

Trichomes

Small hairs or other outgrowths from the epidermis of plants, often serving as defense against herbivores and reducing water loss.