Two mutually exclusive projects have an initial cost of $60,000 each. Project A produces cash inflows of $30,000, $27,000, and $20,000 for Years 1 through 3, respectively. Project B produces cash inflows of $80,000 in Year 2 only. The required rate of return is 10 percent for Project A and 11 percent for Project B. Which project(s) should be accepted and why

Project B

Explanation:

The computation of the net present value is shown below:

For project A

              (in dollars)                                              (in dollars)

YearCash flowsDiscount factor at 10%  Present value  

0             -60000                          1                               -60000.00  (A)

1               30000                 0.9090909091                 27272.73

2              27000                 0.826446281                    22314.05

3              20000                 0.7513148009                  15026.30

Total present value                                                       64613.07  (B)

Net present value                                                         4613.07   (B - A)

For project B

              (in dollars)                                              (in dollars)

YearCash flowsDiscount factor at 11%  Present value  

0             -60000                          1                               -60000.00  (A)

1               0                         0.9009009009                   0

2             80000                0.8116224332                     64929.79

3             0                          0.7311913813                        0

Total present value                                                       64929.79 (B)

Net present value                                                         4929.79  (B - A)

As we can see that project B has high net present value as compared with project A so project B should be accepted

answer; (c) canada,mexico and the united states. i do believe this is the correct answer; /// good luck

typically a loft will include modern kitchen and bathrooms, this increases the price tag. lofts also have a good amount of open space, this requires more heating and electricity. lofts are also in older buildings, this means that maintaining the location increases the bill. keep in mind this is without talking about the high state and property taxes.

i hope this you! : )