Score 0 of 1 pt 10of13 7 complete HW Score 3462 45 of 13 pts

Score: 0 of 1 pt 10of13 (7 complete) HW Score: 34.62%, 4.5 of 13 pts Problem 5-39 (algorithmic) Question Help * Consider the cash flow data in the table below for two competing investment projects At 1-14%, which of the two projects would be a better cho Click the icon to view the cash flows for the investment projects More Info Click the icon to vie w the interest factors for discrete compounding when i= 14% per year The Pw value for project A is (Round to the nearest dollar.) Cash Flow Data (Unit: S thousand) Project A Project B -$1,300 -1,000 - 425 905 905 1,455 1.735 575 575 435 850 $3,800 -800 750 910 1,330 1,910 1,540 800 770 320 1,040 Enter your answer in the answer box and then click Check Answer Print Done parts

Solution

PW of project A is computed as follows.

Period (n)	Cash Flow ($)	PV Factor @14%	Discounted Cash Flow ($)
	(A)	(B)	(A) x (B)
0	-13,00,000	1.0000	-13,00,000
1	-10,00,000	0.8772	-8,77,193
2	-4,25,000	0.7695	-3,27,024
3	9,05,000	0.6750	6,10,849
4	9,05,000	0.5921	5,35,833
5	14,65,000	0.5194	7,60,875
6	17,35,000	0.4556	7,90,443
7	5,75,000	0.3996	2,29,791
8	5,75,000	0.3506	2,01,571
9	4,35,000	0.3075	1,33,766
10	8,50,000	0.2697	2,29,282
		PW ($) =	988,194