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To determine the appropriate discount factors using tables

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Reference no: EM13574903

Labeau Products, Ltd., of Perth, Australia, has $19,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:

  • Invest in
  • Project X Invest in
  • Project Y
  • Investment required $19,000 $19,000
  • Annual cash inflows $10,000
  • Single cash inflow at the end of 8 years $58,000
  • Life of the project 8 years 8 years

The company's discount rate is 16%.To determine the appropriate discount factor(s) using tables, click here to view Exhibit 12B-1 and Exhibit 12B-2. Alternatively, if you calculate the discount factor using a formula, round to three (3) decimal places before using the factor in the problem.

Reference no: EM13574903

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