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EXERCISE 13–11 Comparison of Projects Using Net Present Value [LO1] Sharp Company has $15,000 to… 1 answer below » EXERCISE 13–11 Comparison of Projects Using Net Present Value [LO1] Sharp Company has $15,000 to invest. The company is trying to decide between two alternative uses of the funds as follows: View complete question » Invest in Project A Invest in Project B Investment required . . . . . . . . . . . . . . . . . . . . $15,000 $15,000 Annual cash inflows . . . . . . . . . . . . . . . . . . . . $4,000 $0 Single cash inflow at the end of 10 years . . . . Life of the project . . . . . . . . . . . . . . . . . EXERCISE 13–11 Comparison of Projects Using Net Present Value [LO1] Sharp Company has $15,000 to invest. The company is trying to decide between two alternative uses of the funds as follows: Invest in Project A Invest in Project B Investment required . . . . . . . . . . . . . . . . . . . . $15,000 $15,000 Annual cash inflows . . . . . . . . . . . . . . . . . . . . $4,000 $0 Single cash inflow at the end of 10 years . . . . Life of the project . . . . . . . . . . . . . . . . . . . . . . 10 years $60,000 10 years Sharp Company uses a 16% discount rate. Required: (Ignore income taxes.) Which investment would you recommend that the company accept? Show all computations using net present value. Prepare separate computations for each investment. View less » Dec 07 2015 06:13 PM
