ACCT $254$

Present Value Calculation Assignment

Chichester Company is considering investing in the following two mutually exclusive projects:

$\backslash$table$[[,$Annual Cash Inflows$],[$Year$,,$ct A$,$Project B$],[1,$$$,5,000,3,500],[2,,4,000,3,500],[3,,3,000,3,500],[4,,2,000,3,500],[$Total$,$$$,14,000,14,000]]$

Required:

Which project is more desirable strictly in terms of cash inflows? Why?

Compute the present value of each project's cash inflows assuming the company's required rate of return is $10\%.$

What is the maximum amount Chichester should be willing to pay for each project?

Suppose each project costs $$10,000.$ Which project$($s$)$ should be accepted?