Question: 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 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 ($25,000 investment) ($27,000 investment) Year Cash Flow Year Cash Flow 1 $ 6,000 1 $ 18,000 2 9,000 2 9,000 3 10,000 3 7,000 4 13,000 ________________________________________ 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 9 percent. Project E Project H
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