Consider the following data table for Projects A, B and C. Annual Initial Investmen Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Discount Inflation t Year 1 Year 3⚫ Year 3 Year 4 Year 5 Rate Rate PROJECT A $40,000 $20,000 $20,000 $30,000 $40,000 $40,000 10% 5% PROJECT B $100,000 $40,000 $50,000 $60,000 $65,000 $70,000 8% 3% PROJECT C $100,000 $50,000 $100,000 $15,000 $80,000 6% 5% a) Compare NPVs among Projects A, B and C (showing your calculations). Which project is the most profitable?

Consider the following data table for Projects A, B and C. Annual Initial Investmen Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Discount Inflation t Year 1 Year 3⚫ Year 3 Year 4 Year 5 Rate Rate PROJECT A $40,000 $20,000 $20,000 $30,000 $40,000 $40,000 10% 5% PROJECT B $100,000 $40,000 $50,000 $60,000 $65,000 $70,000 8% 3% PROJECT C $100,000 $50,000 $100,000 $15,000 $80,000 6% 5% a) Compare NPVs among Projects A, B and C (showing your calculations). Which project is the most profitable?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2BE

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