Cedric Inc. is considering two mutually exclusive projects.
Project 1 requires an investment of $100,000 while project 2 requires an investment o $110,000.
Revenues and costs for each project are shown below. The company estimates that at the end of the fourth year Project 1 would have a salvage value of $20,000 and Project 2 would have a salvage value of $10,000.
Determine the net present value of each project using a 14% discount rate.

Question

Cedric Inc. is considering two mutually exclusive projects.
Project 1 requires an investment of $100,000 while project 2 requires an investment o $110,000.
Revenues and costs for each project are shown below.  The company estimates that at the end of the fourth year Project 1 would have a salvage value of $20,000 and Project 2 would have a salvage value of $10,000.
Determine the net present value of each project using a 14% discount rate.

Quizplus · Accepted Answer

The Answer of Cedric Inc. is considering two mutually exclusive projects.
Project 1 requires an investment of $100,000 while project 2 requires an investment o $110,000.
Revenues and costs for each project are shown below.  The company estimates that at the end of the fourth year Project 1 would have a salvage value of $20,000 and Project 2 would have a salvage value of $10,000.
Determine the net present value of each project using a 14% discount rate.

Cedric Inc. Is Considering Two Mutually Exclusive Projects