Considering two mutually exclusive projects

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Reference no: EM13873399

Zellers, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate $48,000 in year one and $45,000 in year two. Project B costs $80,000 and is expected to generate $34,000 in year one, $37,000 in year two, $26,000 in year three, and $25,000 in year four. Zellars, Inc.'s required rate of return for these projects is 10%. The net present value for Project A is:

a. $5,826

b. $6,347

c. $18,000

d. $9,458

Reference no: EM13873399

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