14 Keller Construction is considering two new investments Project E calls for the purchase of earthmoving equipment Project H represents an investment in a hydraulic lift Keller wishes to use a net present value profile in comparing the projects The investment and cash flow patterns are as follows Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods Project E Project H ($54,000 Investment) ($48,000 Investment) Year Cash Flow Year Cash Flow 1 $ 12,000 1 $ 24,000 2 16,000 2 17,000 3 26,000 3 18,000 4 33,000 a Determine the net present value of the projects based on a zero percent discount rate Project E Project H b Determine the net present value of the projects based on a discount rate of 11 percent (Do not round intermediate calculations and round your answers to 2 decimal places ) Project E Project H c If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 11 percent Project E Project H Both H and E

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Question: 14. Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic

14. Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Project E			Project H
($54,000 Investment)			($48,000 Investment)
Year	Cash Flow		Year	Cash Flow
1	$	12,000	1	$	24,000
2		16,000	2		17,000
3		26,000	3		18,000
4		33,000

a. Determine the net present value of the projects based on a zero percent discount rate.


Project E
Project H

b. Determine the net present value of the projects based on a discount rate of 11 percent. (Do not round intermediate calculations and round your answers to 2 decimal places.)


Project E
Project H

c. If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 11 percent?

	Project E
	Project H
	Both H and E

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