Monson Company is considering three investment opportunities with cash flows as described below (Ignore income taxes):
Project A:
Cash investment now $ 13,700
Cash inflow at the end of 5 years $ 21,400
Cash inflow at the end of 8 years $ 21,400
Project B:
Cash investment now $ 11,900
Annual cash outflow for 5 years $ 3,400
Additional cash inflow at the end of 5 years $ 21,700
Project C:
Cash investment now $ 20,400
Annual cash inflow for 4 years $ 10,100
Cash outflow at the end of 3 years $ 4,700
Additional cash inflow at the end of 4 years $ 15,600
Required:
Compute the net present value of each project assuming Monson Company uses a 14% discount rate. (Use Table 12B.1 and Table 12B.2.) (Negative amounts should be indicated by a minus sign. Round “PV factors” to 3 decimal places. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.)
Net Present Value
Project A?
Project B?
Project C?