Part Five

APPLY THE CONCEPTS: Net present value and Present value index.

Krause Corp. is looking to invest in Project A or Project B. The data surrounding each project is provided below. Krause's cost of capital is 11%.

Project A

This project requires an initial investment of $165,000. The project will have a life of 6 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000.

Project B

This project requires an initial investment of $137,500. The project will have a life of 4 years. Annual revenues associated with the project will be $113,000 and expenses associated with the project will be $60,000.

A B

Total present value of net cash flow
Amount to be invested	165,000 -	137500
Net present value
Present value index:
Project A	2.44
Project B

Part Five APPLY THE CONCEPTS: Net prenent value and Present value Index Krause Corp. is looking to invest in Project A or Project. The data surrounding each project is provided below.Krause's cost of capital is 11% Project A Projects This project requires an initial investment of The project requires an initial Investment of $165,000. The project will have a fe of 6 $137.500. The project will have a life of 4 Years Annual revenues associated with the Years Annual revenues associated with the project will be $130,000 anpenses project will be $119,000 and expenses dated with the protect will be 35.000 associated with the project will be $10.000 Cute that pret and the wider for each rject using the present value to be We of singlem) at Compound Pre Value of an oto 1 Compound Interest, Umission to indicate a negative . a mis on Pro Project 114,175 x vel of cow mount to be invested 165,000 12,500 present Presente 2:44 Project Pract heel which was the martes CA the precies which is a higher Peel APPLY THE CONCEPTS: Internal rater The Kruse purchasing department has made revisions to their costs and annual cash flows for Project A and Projectoined below. Project Project Project A' revised Investments 236.100. The Project's revised investment is $141,500. projects and cash flow have changed to The walut's life and cash flow have changed Years and 1,500, respectively, while expenses to 6 years and 187.500 while expenses have been inated reduced to $55.000 Content of reader for and Project and then identity each project's corresponding percentage from the Printable Nei, doma WA Terwis and this was to which is the great way Project The and is corresponds to which is the best valuar Part Five APPLY THE CONCEPTS: Net prenent value and Present value Index Krause Corp. is looking to invest in Project A or Project. The data surrounding each project is provided below.Krause's cost of capital is 11% Project A Projects This project requires an initial investment of The project requires an initial Investment of $165,000. The project will have a fe of 6 $137.500. The project will have a life of 4 Years Annual revenues associated with the Years Annual revenues associated with the project will be $130,000 anpenses project will be $119,000 and expenses dated with the protect will be 35.000 associated with the project will be $10.000 Cute that pret and the wider for each rject using the present value to be We of singlem) at Compound Pre Value of an oto 1 Compound Interest, Umission to indicate a negative . a mis on Pro Project 114,175 x vel of cow mount to be invested 165,000 12,500 present Presente 2:44 Project Pract heel which was the martes CA the precies which is a higher Peel APPLY THE CONCEPTS: Internal rater The Kruse purchasing department has made revisions to their costs and annual cash flows for Project A and Projectoined below. Project Project Project A' revised Investments 236.100. The Project's revised investment is $141,500. projects and cash flow have changed to The walut's life and cash flow have changed Years and 1,500, respectively, while expenses to 6 years and 187.500 while expenses have been inated reduced to $55.000 Content of reader for and Project and then identity each project's corresponding percentage from the Printable Nei, doma WA Terwis and this was to which is the great way Project The and is corresponds to which is the best valuar