Description of this paper

Which investment alternative (if either) would you recommend that the company accept? Show all

Description

solution


Question

Which investment alternative (if either) would you recommend that the company accept? Show all computations using the net present value method. Prepare separate computations for each year.;Wriston Legacies, a retailer of fine estate jewelry, has $300,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are;Project A Project B;Cost of equipment required $300,000 $0;Working capital investment required $0 $300,000;Annual Cash inflows $80,000 $60,000;Salvage value of equipment in seven years $20,000 0;Life of the project 7 years 7 years;The working capital needed for project B will be released for investment elsewhere at the end of seven years. Wriston Legacies uses a 20% discount rate;Required;Which investment alternative (if either) would you recommend that the company accept? Show all computations using the net present value method. Prepare separate computations for each year.

 

Paper#24885 | Written in 18-Jul-2015

Price : $27
SiteLock