"Consider two mutually exclusive projects that will be conducted for a total of 6 years. Project...

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"Consider two mutually exclusive projects that will be conductedfor a total of 6 years. Project A lasts 3 years (so it will need tobe repeated 1 time) and has the following cash flow: Year 0-$18,000; Year 1 $20,000; Year 2 $16,000; Year 3 $18,000. Project Blasts 2 years (so it will need to be repeated 2 times) and has thefollowing cash flow: Year 0 -$17,000; Year 1 $15,000; Year 2$22,000. Assume both projects can be repeated with the identicalcash flows. The interest rate is 16%. Provide the Net Present Worthfor 6 YEARS of the project that you should select. If neitherproject should be selected, enter 0."

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Project A Net present value is solved using a financial calculator The steps to solve on the financial calculator Press the CF button CF0 18000 It is entered with a negative sign since it is a cash outflow Cash flow for all the years See Answer

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Transcribed Image Text

"Consider two mutually exclusive projects that will be conductedfor a total of 6 years. Project A lasts 3 years (so it will need tobe repeated 1 time) and has the following cash flow: Year 0-$18,000; Year 1 $20,000; Year 2 $16,000; Year 3 $18,000. Project Blasts 2 years (so it will need to be repeated 2 times) and has thefollowing cash flow: Year 0 -$17,000; Year 1 $15,000; Year 2$22,000. Assume both projects can be repeated with the identicalcash flows. The interest rate is 16%. Provide the Net Present Worthfor 6 YEARS of the project that you should select. If neitherproject should be selected, enter 0."