9.

Question 9

Percy has been asked by his manager to perform an analysis of two particular business ventures.

The first, Zeus Electronics, will cost $400,000 today and another $100,000 in one years' time, after which the project is expected to generate income of $100,000 every year.

The second business venture, Poseidon Shipping, will cost $500,000 today and another $200,000 in one years' time, and is then expected to generate income of $150,000 every year.

Percy knows that his company's required rate of return for such projects is 10% per annum effective.

Calculate the NPV of Zeus Electronics. Round your answer to thenearest $1000.

Review the video: Capital budgeting - Net Present Value (NPV)

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10.

Question 10

Percy has been asked by his manager to perform an analysis of two particular business ventures.

The first, Zeus Electronics, will cost $400,000 today and another $100,000 in one years' time, after which the project is expected to generate income of $100,000 every year.

The second business venture, Poseidon Shipping, will cost $500,000 today and another $200,000 in one years' time, and is then expected to generate income of $150,000 every year.

Percy knows that his company's required rate of return for such projects is 10% per annum effective.

Calculate the NPV of Poseidon Shipping. Round your answer to the nearest $1000.