Reference no: EM132456889

ACC 202 Principles of Managerial Accounting Assignment - Ashford University, USA

Question - Darling Corp. is looking to invest in Project A or Project B. The data surrounding each project is provided below. Darling's cost of capital is 10%.

Project A - This project requires an initial investment of $167,500. The project will have a life of 3 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000.

Find -

1. Total present value of net cash flow

2. Amount to be invested

3. Net present value

Project B - This project requires an initial investment of $130,000. The project will have a life of 5 years. Annual revenues associated with the project will be $115,000 and expenses associated with the project will be $60,000.

Find -

1. Total present value of net cash flow

2. Amount to be invested

3. Net present value.