Explore our Solution Library

Number of Views - 1934 194

San Diego State University Operations And Supply Chain Management Assignment Help - Equipment


Question - Exercise 11-8 Net Present Value Analysis of Two Alternatives [LO1]
Wriston Company has $400,000 to invest. The company is trying to decide between two alternative uses of the
funds. The alternatives are as follows:

A B
Cost of equipment required $ 400,000 $ 0
Working capital investment required $ 0 $ 400,000
Annual cash inflows $ 76,000 $ 65,000
Salvage value of equipment in five years $ 18,000 $ 0
Life of the project 5 years 5 years

The working capital needed for project B will be released for investment elsewhere at the end of five years.
Wriston Company uses a 10% discount rate. (Ignore income taxes.)

Click here to view Exhibit 11B-1 andExhibit 11B-2, to determine the appropriate discount factor(s) using tables.

Re ...Read More

Solution Preview - No Solution Preview Available

Original Question Documents

Found What You Need?

Scroll down to find more if you need to find our more features