Labeau Products Ltd of Perth, Australia, has $ to invest. The company is trying to decide between two alternative uses for the funds, as follows:
Investment Options
Project X Project Y
Initial Investment $ $
Annual cash inflows
Single cash inflow at the end of years
Life of the project years years
Labeaus discount rate for both projects is Ignore income taxes.
Click here to view Exhibit and Exhibit to determine the appropriate discount factors using tables.
Required:
Determine the net present value. Negative amounts should be indicated with a minus sign. Round discount factors to decimal places.
Which alternative would you recommend that the company accept?
multiple choice
Project X
Project Y
