Exercise 11-11 Comparison of Projects Using Net Present Value [L011-2] Labeau Products, Ltd., of Perth,...
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Exercise 11-11 Comparison of Projects Using Net Present Value [L011-2] Labeau Products, Ltd., of Perth, Australia, has $15,000 to invest. The company is trying to decide between two alternative uses for the funds as follows Invest in Invest in Project X Project Y $15,000 15,000 $ 5,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project 6 years 6years The company's discount rate is 16%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables Required a. Determine the net present values Project X Project Y Net Present Value b. Which alternative would you recommend that the company accept? Project X Project Y
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