Question: Regarding company 1 based on the net present value (NPV) criteria, we have only $440,000 to invest and the net present value over the 5
Regarding company 1 based on the net present value (NPV) criteria, we have only $440,000 to invest and the net present value over the 5 years would amount to $380,745.68 which will result in a loss of $59,254.33. Regarding company 2, based on the net present value (NPV) criteria, as we have only $440,000 to invest and the net present value is positive, over the 5 years would be $442, 359.42, which yields a profit of $2,359.42. Which company would you invest in and why? What is the highest level of initial investment you would make to purchase each company? Why? Give a complete explanation of the highest dollar amount you would be willing to invest for these returns.
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