Exercise 13 14 Comparison Projects Using Net Present Value Lo13 2 Labeau Products Ltd Pert Q28209825

EXERCISE 13–14 Comparison of Projects Using Net PresentValue [LO13–2]

Labeau Products, Ltd., of Perth, Australia, has $35,000 toinvest. The company is trying to decide between two alternativeuses for the funds as follows:

The company’s discount rate is 18%.

Required:

Which alternative would you recommend that the company accept?Show all computations using the net present value approach. Prepareseparate computations for each project.

Invest in Invest in Project X Project Y $35,000 $%35,000 $12,000 $90,000 6 years Single cash inflow at the end of 6 years . . . . . .. . 6 years Show transcribed image text