Q1) Monson Company is considering three investment opportunities with cash flows as explained below:
Project A
|
Cash investment now
|
$15,000
|
Cash inflow at the end of 5 years
|
$21,000
|
Cash inflow at the end of 8 years
|
$21,000
|
Project B
|
Cash investment now
|
$11,000
|
Annual Cash outflow for 5 years
|
$3,000
|
Additional Cash inflow at the end of 5 years
|
$21,000
|
Project C
|
Cash investment now
|
$21,000
|
Annual Cash outflow for 4 years
|
$11,000
|
Cash inflow at the end of 3 years
|
$5,000
|
Additional Cash inflow at the end of 4 years
|
$15,000
|
Question:
Calculate net present value of each project supposing Monson Company uses 12% discount rate.