Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 . . . . . . . . . . . . . . . . . . $ 3,000 $12,000 2 . . . . . . . . . . . . . . . . . . 6,000 9,000 3 . . . . . . . . . . . . . . . . . . 9,000 6,000 4 . . . . . . . . . . . . . . . . . . 12,000 3,000 Total $30,000 $30,000
The discount rate is 18%.
determine the appropriate discount factor(s) using tables.
Required:
Compute the present value of the cash inflows for each investment. Each investment opportunity will require the same initial investment. (Use the appropriate table to determine the discount factor(s).)