Cambrian College has to choose between two investment alternatives. Alternative A (a new residence) will provide returns to thecollege of $30.000 after 2 years, $20,000 after 3 years and $10,000 after 4 years. Only $2000 per year is made in years five andsix. Alternative B(a new gym) will bring returns of $11,000 per year for 6 years. If the college expects a return of 9%compounded annually on investments, what is the NPV of Alternative B?Select one:a. $27,034b. $27,879C. $50,271d. $49,345

Given information for Alternative B is: Annual Cash flow = $11000 Years = 6 Interest rate = 9%

Answered: nts. what is the NPV of Alternative B?

Business

Accounting

nts. what is the NPV of Alternative B?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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