Question
In: Finance
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is
considering two new investments. Project E calls for the purchase
of earthmoving equipment. Project H represents an investment in a
hydraulic lift. Keller wishes to use a net present value profile in
comparing the projects. The investment and cash flow patterns are
as follows: Use Appendix B for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
| Project E | Project H | |||||||
| ($30,000 Investment) | ($28,000 Investment) | |||||||
| Year | Cash Flow | Year | Cash Flow | |||||
| 1 | $ | 8,000 | 1 | $ | 17,000 | |||
| 2 | 11,000 | 2 | 12,000 | |||||
| 3 | 12,000 | 3 | 10,000 | |||||
| 4 | 15,000 | |||||||
a. Determine the net present value of the projects
based on a zero percent discount rate.
b. Determine the net present value of the projects
based on a discount rate of 11 percent. (Do not round
intermediate calculations and round your answers to 2 decimal
places.)
c. If the projects are not mutually exclusive,
which project(s) would you accept if the discount rate is 11
percent?
-
Project E
-
Project H
-
Both H and E
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods. Project E Project H
($43,000 Investment) ($39,000 Investment) Year Cash Flow Year Cash
Flow...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods. Project E Project H
($23,000 Investment) ($25,000 Investment) Year Cash Flow Year Cash
Flow...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($40,000 Investment)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($32,000 Investment)
($27,000 Investment)
Year
Cash Flow
Year
Cash Flow...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($23,000 Investment)
($25,000 Investment)
Year
Cash Flow
Year
Cash...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($43,000 Investment)
($39,000 Investment)
Year
Cash Flow
Year
Cash...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($45,000 Investment)
($40,000 Investment)
Year
Cash Flow
Year
Cash...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($37,000 Investment)
($35,000 Investment)
Year
Cash Flow
Year
Cash...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($19,000 Investment)
($19,000 Investment)
Year
Cash Flow
Year
Cash Flow...
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project
E calls for the purchase of earthmoving equipment. Project H
represents an investment in a hydraulic lift. Keller wishes to use
a net present value profile in comparing the projects. The
investment and cash flow patterns are as follows: Use Appendix B
for an approximate answer but calculate your final answer using the
formula and financial calculator methods.
Project E
Project H
($54,000 Investment)
($48,000 Investment)
Year
Cash Flow
Year
Cash Flow...
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