Monson Company is considering three investment opportunities with cash flows as
ID: 2376088 • Letter: M
Question
Monson Company is considering three investment opportunities with cash flows as described below (Ignore income taxes):
Compute the net present value of each project assuming Monson Company uses a 13% discount rate. (Use Table 13.1 and Table 13.2.) (Negative amounts should be indicated by a minus sign. Round "PV factors" to 3 decimal places. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Project A: Cash investment now $ 14,000 Cash inflow at the end of 6 years $ 22,000 Cash inflow at the end of 9 years $ 22,000 Project B: Cash investment now $ 10,300 Annual cash outflow for 6 years $ 3,700 Additional cash inflow at the end of 6 years $ 23,000 Project C: Cash investment now $ 20,500 Annual cash inflow for 5 years $ 10,300 Cash outflow at the end of 4 years $ 4,100 Additional cash inflow at the end of 5 years $ 14,200
Explanation / Answer
So answers asre :
A : $ 40588.73
B: $ -14043.61
C : $ 20920.07