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samualson samualson
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Posts: 2459
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6 years ago
Interstate Appliance Inc. is considering the following 3 mutually exclusive projects. Projected cash flows for these ventures are as follows:

Plan APlan BPlan C
InitialInitialInitial
Outlay = $3,600,000Outlay = $6,000,000Outlay = $3,500,000
Cash Flow:Cash Flow:Cash Flow:
Yr 1 = $-0-Yr 1 = $4,000,000Yr 1 = $2,000,000
Yr  2= -0-Yr 2 =  3,000,000Yr 2 = -0-
Yr 3 = -0-Yr 3 =  2,000,000Yr 3 = 2,000,000
Yr 4 = -0-Yr 4 = -0-Yr 4 = 2,000,000
Yr 5 = $7,000,000Yr 5 = -0-Yr 5 = 2,000,000

If Interstate Appliance has a 12% cost of capital, what decision should be made regarding the projects above?
A) accept plan A
B) accept plan B
C) accept plan C
D) accept Plans A, B and C
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DeanaRayDeanaRay
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6 years ago
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samualson Author
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6 years ago
Thanks
kevin12323h
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Yesterday
Correct Slight Smile TY
dianeflunder
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2 hours ago
this is exactly what I needed
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