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Determine the net present value of alpha and beta

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Reference no: EM132586258

Mitchell Company has $30,000 to invest and has two alternative uses of the funds, as shown below. Mitchell Company uses an 8% discount rate:

Invest in

Project Alpha Invest in :$30,000 ,

Annual cash inflows :$8,000,

Single cash inflow at the end of 10 years $ 0

Project Beta Investment required$30,000 ,

Annual cash inflows $ 0

Single cash inflow at the end of 10 years: $120,000

Life of the project 10 years For two projects

Ignore income taxes.

Required:

Question a. Determine the net present value of Alpha and Beta

Reference no: EM132586258

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