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Prepare separate computations for each project

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Labeau Products, Ltd. Of Perth, Australia, has $35,000 to invest, The company is trying to decide between two alternative uses for the funds as follows:

 

Invest in Project X

Invest in Project Y

Investment required

$35,000

$35,000

Annual cash inflows

$9,000

 

Single cash inflow at the end of 10 years

 

$150,000

Life of the project

10 years

10 years

The company's discount rate is 18%

(ignore income taxes) Which alternative would you recommend that the company accept? Show all computations using the net present value approach. Prepare separate computations for each project.

 

Reference no: EM13490473

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