Question: (Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $9,000,000

 (Net present value calculation) Carson Trucking is considering whether to expandits regional service center in Mohab, UT. The expansion requires the expenditure

(Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $9,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to $3,000,000 per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at $1.1 million. Thus, in year the investment cash inflow totals $4,100,000. Calculate the project's NPV using a discount rate of 10 percent. (Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A Project B Cash Flow Cash Flow 0 $(102,000) $(102,000) 1 40,000 0 40,000 0 3 40,000 0 4 40,000 0 5 40,000 200,000 (Click on the icone in order to copy its contents into a spreadsheet.) If the appropriate discount rate on these projects is 9 percent, which would be chosen and why? 2 The NPV of Project A is $ 53586.05. (Round to the nearest cent.) The NPV of Project B is $(Round to the nearest cent.)

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