Solution-Determine which projects should be acquired

Determine which projects should be acquired

Reference no: EM132771710

Question - Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $324,000 and would yield the following annual cash flows.

	C1	C2	C3
Year 1	$44,000	$128,000	$212,000
Year 2	140,000	128,000	92,000
Year 3	200,000	128,000	80,000
Totals	$384,000	$384,000	$384,000

Required - Assume that the company requires a 8% return from its investments. Using net present value, determine which projects, if any, should be acquired.

Reference no: EM132771710

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Determine which projects should be acquired

Reference no: EM132771710

Reference no: EM132771710

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