PLEASE I NEED THE ANWSER NAW XZ Company is medium sized metal fabricator...
90.2K
Verified Solution
Link Copied!
Question
Finance
PLEASE I NEED THE ANWSER NAW
XZ Company is medium sized metal fabricator that is currently contemplating two projects: Project A require an initial investment of $ 50,000, Project B require an initial investment of $ 55,000. Assume the NZ Company has a 10% cost of capital and the relevant cash flows for the two projects are presented in the table below:
Project
Project A
Project B
Initial Investment
60,000
65,000
Year
Operating Cash Flow
1
22000
35000
2
22000
18000
3
22000
16000
4
22000
16000
5
22000
16000
Require:
a) Calculate the NPV for Project A and B?
(10: Marks)
b) Based on your NPV findings in section (a) which project will you recommend for NZ Company? (5: Marks)
c) Based on your answer in section (b) justify your recommendation?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
