Using a 14 percent cost of capital, calculate the NPV for each of the projects shown in the following table and indicate whether or not each is acceptable.
| |
Project A |
Project B |
Project C |
Project D |
Project E |
|
Initial Cash Outflow (CFo)
Year (t)
|
$20,000
|
$600,000
|
$150,000
Cash Inflows(CFi)
|
$760,000 |
$100,000
|
|
1
|
$ 3,000
|
$120,000
|
$18,000
|
$185,000 |
$0
|
|
2
|
3,000
|
145,000
|
17,000
|
185,000 |
0
|
|
3
|
3,000
|
170,000
|
16,000
|
185,000 |
0
|
|
4
|
3,000
|
190,000
|
15,000
|
185,000 |
25,000
|
|
5
|
3,000
|
220,000
|
15,000
|
185,000 |
36,000
|
|
6
|
3,000
|
240,000
|
14,000
|
185,000 |
0
|
|
7
|
3,000
|
|
13,000
|
185,000 |
60,000
|
|
8
|
3,000
|
|
12,000
|
185,000 |
72,000
|
|
9
|
3,000
|
|
11,000
|
|
84,000
|
|
10
|
3,000
|
|
10,000
|
|
|