exercise 13-14 chapter 13

Exercise 13-14 Comparison of Projects Using Net Present Value (L013-2] Labeau Products, Ltd., of Perth, Australia, has $35,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Invest in invest in Project x Project $ 35,000 $35,000 $ 12,000 $90,000 6 years 6 years The company's discount rate is 18% Required: 1. Compute the net present value of Project X 2. Compute the net present value of Project Y 3. Which project would you recommend the company accept? Required 1 Required 2 Required 3 Compute the net present value of Project X. (Round your final answer to the nearest whole dollar amount.) Net present value Required 1 Required 2 Required 3 Compute the net present value of Project Y. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount) Nel present value Required 1 Required 2 Required 3 Which project would you recommend the company accept? O Project X Project Y