Exampie 12: A company is appraising two projccts A and B. Assuming the present value of future cash flows for project A is 75,000 and that for project B is 74,850. Also assume that both projects have an initial capital investment of 4,750 cach. Calculate the PI for both projects and determine whether or not to invest in the projects.

Intermediate Algebra
19th Edition
ISBN:9780998625720
Author:Lynn Marecek
Publisher:Lynn Marecek
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...
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Exampie 12: A company is appraising two projects A and B. Assuming the present value of future cash flows for
project A is 75,000 and that for project B is 74,850. Also assume that both projects have an initial capital investment
of R4,750 each. Calculate the PI for both projects and determine whether or not to invest in the projects.
Transcribed Image Text:Exampie 12: A company is appraising two projects A and B. Assuming the present value of future cash flows for project A is 75,000 and that for project B is 74,850. Also assume that both projects have an initial capital investment of R4,750 each. Calculate the PI for both projects and determine whether or not to invest in the projects.
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