Darling Corp. is looking to invest in Project A or Project B. The data surrounding each project is provided below. Darling’s cost of capital is 10%.Project A
Darling Corp. is looking to invest in Project A or Project B. The data surrounding
each project is provided below. Darling’s cost of capital is 10%.Project A
This project requires an initial investment of $167,500. The project will have a life of 3 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000.
- Total present value of net cash flow=————-
- Amount to be invested=$167,500
- Net present value=————–
Project B
This project requires an initial investment of $130,000. The project will have a life of 5 years. Annual revenues associated with the project will be $115,000 and expenses associated with the project will be $60,000.