The treasurer of Amaro Canned Fruits, INC., has projected the cash flows of projects A, B,...

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Finance

The treasurer of Amaro Canned Fruits, INC., has projected thecash flows of projects A, B, and C as follows
Year
Project A
Project B
Project C
1
-100,000
-200,000
-150,000
2
60,000
130,000
110,000
3
60,000
130,000
110,000
Suppose the cost of capital is 10percent and Amaro’s budget for these projects is $ 300,000. Theprojects are not divisible. Which project(s) should Amaroaccept?

Answer & Explanation Solved by verified expert

3.6 Ratings (562 Votes)

NPV of the projects can be calculated using the formulaProjectAC1 100000 C2 60000 C3 60000r 10NPVA 909091 4958678 See Answer

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The treasurer of Amaro Canned Fruits, INC., has projected thecash flows of projects A, B, and C as followsYearProject AProject BProject C1-100,000-200,000-150,000260,000130,000110,000360,000130,000110,000Suppose the cost of capital is 10percent and Amaro’s budget for these projects is $ 300,000. Theprojects are not divisible. Which project(s) should Amaroaccept?

Year	Project A	Project B	Project C
1	-100,000	-200,000	-150,000
2	60,000	130,000	110,000
3	60,000	130,000	110,000