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Determine the net present value of project

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Question - Project 1 requires an original investment of $80,000. The project will yield cash flows of $14,000 per year for eight years. Project 2 has a calculated net present value of $5,000 over a five-year life. Project 1 could be sold at the end of five years for a price of $50,000. (a) Determine the net present value of Project 1 over a five-year life with salvage value assuming a minimum rate of return of 10%. (b) Which project provides the greatest net present value?

Reference no: EM132942534

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