Deep West Ltd. (DWL), of Perth, Australia, has $42,220 to invest. The company is trying to...

 

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Deep West Ltd. (DWL), of Perth, Australia, has $42,220 to invest. The company is trying to decide between two alternative uses for the funds, as follows: Initial Investment Annual cash inflows Single cash inflow at the end of 10 years. Life of the project Investment Options Project X Project Y $ 42,220 9,500 $ 42,220 10 years 161,000 10 years. DWL's discount rate for both projects is 18%. (Ignore income taxes.) Required: Determine the net present value. (Negative amounts should be indicated with a minus sign. Round discount factor(s) to 3 decimal places.) Net Present Value Project X Project Y Deep West Ltd. (DWL), of Perth, Australia, has $42,220 to invest. The company is trying to decide between two alternative uses for the funds, as follows: Initial Investment Annual cash inflows Single cash inflow at the end of 10 years. Life of the project Investment Options Project X Project Y $ 42,220 9,500 $ 42,220 10 years 161,000 10 years. DWL's discount rate for both projects is 18%. (Ignore income taxes.) Required: Determine the net present value. (Negative amounts should be indicated with a minus sign. Round discount factor(s) to 3 decimal places.) Net Present Value Project X Project Y

Answer rating: 100% (QA)

To calculate the net present value NPV for each project we need to discount the cash flows from each ... View the full answer