Net Present Value Analysis

Anderson Company must evaluate two capital expenditure proposals. Anderson's hurdle rate is 12%. Data for the two proposals follow.

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.

Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6, 9, and 12 Life of project Proposal X Proposal Y $60,000 $60,000 12,000 36,000 12 years 12 years Proposal X Proposal Y $ $ Net present value Initial outflows PV of future cash flows Net present value $ $ Which proposal is more attractive? Proposal X Proposal Y