Monson Company is considering three investment opportunities with cash flows as described below:     Project A:  Cash investment now  $15,000     Cash inflow at the end of 5 years  $21,000     Cash inflow at the end of 8 years  $30,000  Project B:  Cash investment now  $11,000     Annual cash outflow for 5 years  $3,000     Additional cash inflow at the end of 5 years  $25,000  Project C:  Cash investment now  $21,000     Annual cash inflow for 4 years  $8,000     Cash outflow at the end of 3 years  $10,000     Additional cash inflow at the end of 4 years  $10,000    needed   Compute the net present value of each project assuming Monson Company uses a 12% discount rate.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section10.A: Mutually Exclusive Investments Having Unequal Lives
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Monson Company is considering three investment opportunities with cash flows as described below: 
  

Project A: 

Cash investment now 

$15,000 

  

Cash inflow at the end of 5 years 

$21,000 

  

Cash inflow at the end of 8 years 

$30,000 

Project B: 

Cash investment now 

$11,000 

  

Annual cash outflow for 5 years 

$3,000 

  

Additional cash inflow at the end of 5 years 

$25,000 

Project C: 

Cash investment now 

$21,000 

  

Annual cash inflow for 4 years 

$8,000 

  

Cash outflow at the end of 3 years 

$10,000 

  

Additional cash inflow at the end of 4 years 

$10,000 

 
needed
 
Compute the net present value of each project assuming Monson Company uses a 12% discount rate. 

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