Question: Net present value. Lepton Industries has four potential projects, each with an initial cost of $1,500,000. The capital budget for the year will only allow
Net present value. Lepton Industries has four potential projects, each with an initial cost of $1,500,000. The capital budget for the year will only allow Lepton to accept one of the four projects. Given the discount rates and the future cash flow of each project, determine which project Lepton should accept.
| Cash Flow | Project Q | Project R | Project S | Project T |
| Year 1 | $350,000 | $400,000 | $700,000 | $ 200,000 |
| Year 2 | $350,000 | $400,000 | $600,000 | $ 400,000 |
| Year 3 | $350,000 | $400,000 | $500,000 | $ 600,000 |
| Year 4 | $350,000 | $400,000 | $400,000 | $ 800,000 |
| Year 5 | $350,000 | $400,000 | $300,000 | $1,000,000 |
| Discount rate | 4% | 8% | 13% | 18% |
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