EOY NCF(A) NCF(B) 0 -$40,000 -$30,000 1 8,000 9,000 2 8,000 8,500 3 8,000 8,000 8,000 7,500 5 8,000 7,000 6. 8,000 6,500 7 8,000 6,000 8 8,000 5,500 9 8,000 5,000 10 8,000 4,500 4
EOY NCF(A) NCF(B) 0 -$40,000 -$30,000 1 8,000 9,000 2 8,000 8,500 3 8,000 8,000 8,000 7,500 5 8,000 7,000 6. 8,000 6,500 7 8,000 6,000 8 8,000 5,500 9 8,000 5,000 10 8,000 4,500 4
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Arnold Engineering has available two mutually exclusive investment proposals, A and B. Their net cash flows are as shown in the table over a 10-year planning horizon. MARR is 12%. Determine which alternative the decision maker should select using an external
Transcribed Image Text:EOY NCF(A) NCF(B)
0 -$40,000 -$30,000
1
8,000
9,000
2
8,000
8,500
3
8,000
8,000
8,000
7,500
5
8,000
7,000
6.
8,000
6,500
7
8,000
6,000
8
8,000
5,500
9
8,000
5,000
10
8,000
4,500
4
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