ABC Company has calculated the net present value of two investment opportunities but must decide which option to pursue: Project X: Present value of cash flows = $117,000 Investment = $100,000 Net present value = $17,000 Project Z: Present value of cash flows = $138,000 Investment = $120,000 Net present value = $18,000 Complete the following: Present value ratio of Project X = Present value ratio of Project Z = Decision = Invest in (Project X/Project Z)

ABC Company has calculated the net present value of two investment opportunities but must decide which option to pursue: Project X: Present value of cash flows = $117,000 Investment = $100,000 Net present value = $17,000 Project Z: Present value of cash flows = $138,000 Investment = $120,000 Net present value = $18,000 Complete the following: Present value ratio of Project X = Present value ratio of Project Z = Decision = Invest in (Project X/Project Z)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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