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Evaluate and rank each alternative using net present value

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Lion Enterprises Inc. is evaluating 3 investment alternatives. Each alternative requires a cash outflow of $102,000. The cash inflows are summarized below (ignore taxes):

                                        Project A                     Project B                           Project C

Year 1                        $55000                           $30000                          $0

Year 2                          $40000                            $30000                         $0

Year 3                             $20000                      $30000                        $45000

Year 4                               $5000                         $30000                   $55000

Year                                   $2000                        $30000                       $65000

  • The company has a required rate of return of 9%.

Required:

Question 1: Evaluate and rank each alternative using net present value (NPV).

Reference no: EM132510902

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