Value of projects based on zero percent discount rate

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Reference no: EM131989753

Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project E Project H ($46,000 Investment) ($45,000 Investment) Year Cash Flow Year Cash Flow 1 $ 9,000 1 $ 24,000 2 13,000 2 18,000 3 23,000 3 14,000 4 30,000

a. Determine the net present value of the projects based on a zero percent discount rate.

b. Determine the net present value of the projects based on a discount rate of 12 percent

Reference no: EM131989753

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