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psintusaichol psintusaichol
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9 months ago

Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects (Ignore income taxes.):

Project AProject B
Cost of equipment needed now$ 120,000$ 70,000
Working capital investment needed now$ 0$ 50,000
Annual net operating cash inflows$ 50,000$ 45,000
Salvage value of equipment in 6 years$ 15,000$ 0

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.

Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's discount rate is 14%.

The net present value of Project B is closest to:



▸ $77,805

▸ $127,805

▸ $55,005

▸ $105,005
Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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lampardlampard
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9 months ago
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psintusaichol Author
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9 months ago
Thanks
oscar520000
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Yesterday
Thank you, thank you, thank you!
hmonier
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2 hours ago
Thanks for your help!!
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