# Question

Project A requires an original investment of $ 22,500. The project will yield cash flows of $ 5,000 per year for nine years. Project B has a calculated net present value of $ 3,500 over a six-year life. Project A could be sold at the end of six years for a price of $ 12,000.

(a) Determine the net present value of Project A over a six-year life, with residual value, assuming a minimum rate of return of 12%.

(b) Which project provides the greatest net present value?

(a) Determine the net present value of Project A over a six-year life, with residual value, assuming a minimum rate of return of 12%.

(b) Which project provides the greatest net present value?

## Answer to relevant Questions

Project 1 requires an original investment of $ 55,000. The project will yield cash flows of $ 15,000 per year for seven years. Project 2 has a calculated net present value of $ 5,000 over a four-year life. Project 1 could be ...Nations Trust is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $ 380,000 and each with an eight-year life and expected total net cash flows of $ 608,000. Location 1 is ...Diamond & Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 150 baseballs per hour to sewing 290 per hour. The contribution margin per unit is $ 0.32 per ...Daisy’s Creamery Inc. is considering one of two investment options. Option 1 is a $ 75,000 investment in new blending equipment that is expected to produce equal annual cash flows of $ 19,000 for each of seven years. ...First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows:Instructions 1. Assuming that the desired rate of ...Post your question

0