Mahjong Inc has identified the following two mutually exclus

Mahjong, Inc. has identified the following two mutually exclusive projects. If the required return is 11%, what is the NPV of Project B? *Be sure to inlcude a dollar sign and decimal point in your final answer submission.($9,999.99) Cash Flow (A) $43,000 23,000 17,900 12,400 9,400 Year Cash Flow (B) 0 43,000 2 3 4 NPV 7,000 13,800 24,000 26,000 2

Solution

Calculation of NPV of Project B

Hence, NPV of project B is $9,190.6

Year	Cash flow ($) (i)	PVF(11%, 4) (ii)	Present value of cash flows ($) (i) x (ii)
0	- 43,000	1	- 43,000
1	7,000	0.901	6,307
2	13,800	0.812	11,205.6
3	24,000	0.731	17,544
4	26,000	0.659	17,134
		NPV	9,190.6