) The cash flows for four projects are shown below, along with the cost of capital...

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Finance

) The cash flows for four projects are shown below, along withthe cost of capital for these projects. If these projects aremutually exclusive, which one should be taken? 28) A) Year: 0 1 2 34 5 Cash flow: -$20,000 $6000 $6000 $6000 $6000 $6000 Cost ofCapital: 8.2% B) Year: 0 1 2 3 4 5 Cash flow: -$15,000 $4000 $4000$4000 $4000 $4000 Cost of Capital: 7.0% C) Year: 0 1 2 3 4 5 Cashflow: -$18,000 $5000 $5000 $5000 $5000 $5000 Cost of Capital: 7.6%D) Year: 0 1 2 3 4 5 Cash flow: -$12,000 $4000 $4000 $4000 $4000$4000 Cost of Capital: 5.0%

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ANet present value is solved using a financial calculator The steps to solve on the financial calculator Press the CF button CF0 20000 It is entered with a negative sign since it is a cash outflow Cash flow for all the years should be entered Press Enter and down arrow after inputting each cash flow After entering the last cash flow press the NPV button and enter the cost of capital of 82 Press the down arrow and CPT buttons to get the See Answer

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Transcribed Image Text

) The cash flows for four projects are shown below, along withthe cost of capital for these projects. If these projects aremutually exclusive, which one should be taken? 28) A) Year: 0 1 2 34 5 Cash flow: -$20,000 $6000 $6000 $6000 $6000 $6000 Cost ofCapital: 8.2% B) Year: 0 1 2 3 4 5 Cash flow: -$15,000 $4000 $4000$4000 $4000 $4000 Cost of Capital: 7.0% C) Year: 0 1 2 3 4 5 Cashflow: -$18,000 $5000 $5000 $5000 $5000 $5000 Cost of Capital: 7.6%D) Year: 0 1 2 3 4 5 Cash flow: -$12,000 $4000 $4000 $4000 $4000$4000 Cost of Capital: 5.0%