Net Present Value Analysis Anderson Company must evaluate two capital expenditure proposals. Andersons hurdle rate is 12%. Data for the two proposals follow.

	Proposal X	Proposal Y
Required investment	$120,000	$120,000
Annual after-tax cash inflows	24,000
After-tax cash inflows at the end of years 3, 6, 9, and 12		72,000
Life of project	12 years	12 years

Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value.

	Proposal X	Proposal Y
Net present value
Initial outflows	$120000	$120000
PV of future cash flows	?????	$132170
Net present value	$28665	12170

Which proposal is more attractive? Answer Proposal X Proposal Y

Net Present Value Analysis Anderson Company must evaluate two capital expenditure proposals. Andersons hurdle rate is 12%. Data for the two proposals follow.

Proposal X Proposal Y

Required investment$120,000$120,000

Annual after-tax cash inflows 24,000

After-tax cash inflows at the end of years 3, 6, 9, and 1272,000

Life of project 12 years 12 years

Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value.

Proposal XProposal Y

Net present value

Initial outflows$Answer

$Answer

PV of future cash flowsAnswer

Answer

Net present value$Answer

$Answer

Which proposal is more attractive? AnswerProposal XProposal Y