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28 Sep 2019
Vasquez Corporation is considering investing in two differentprojects. It could invest in both, neither, or just one of theprojects. The forecasts for the projects are as follows.
Project A Project B
Capital investment $195,950 $301,810
Net annual cash flows $50,535 $65,116
Length of project 5 years 7 years
The minimum rate of return acceptable to Vasquez is 10%.
Instructions Compute the net present value of the two projects.(Round answers to 0 decimal places, e.g. 125. If amount isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
PROJECT A $
PROJECT B $
What capital budgeting decision should Vasquez make? Investin
Project A could be modified. By spending $19,395 more initially,the net annual cash flows could be increased by $10,160 peryear.
Calculate the new net present value. $ ______________Whatproject(s) should Vasquez's invest in?
Vasquez Corporation is considering investing in two differentprojects. It could invest in both, neither, or just one of theprojects. The forecasts for the projects are as follows.
Project A Project B
Capital investment $195,950 $301,810
Net annual cash flows $50,535 $65,116
Length of project 5 years 7 years
The minimum rate of return acceptable to Vasquez is 10%.
Instructions Compute the net present value of the two projects.(Round answers to 0 decimal places, e.g. 125. If amount isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
PROJECT A $
PROJECT B $
What capital budgeting decision should Vasquez make? Investin
Project A could be modified. By spending $19,395 more initially,the net annual cash flows could be increased by $10,160 peryear.
Calculate the new net present value. $ ______________Whatproject(s) should Vasquez's invest in?
Project A Project B
Capital investment $195,950 $301,810
Net annual cash flows $50,535 $65,116
Length of project 5 years 7 years
The minimum rate of return acceptable to Vasquez is 10%.
Instructions Compute the net present value of the two projects.(Round answers to 0 decimal places, e.g. 125. If amount isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
PROJECT A $
PROJECT B $
What capital budgeting decision should Vasquez make? Investin
Project A could be modified. By spending $19,395 more initially,the net annual cash flows could be increased by $10,160 peryear.
Calculate the new net present value. $ ______________Whatproject(s) should Vasquez's invest in?
Sixta KovacekLv2
28 Sep 2019