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Exercise 11-8 Net Present Value Analysis of Two
Alternatives [LO1]
Wriston Company has $300,000 to invest. The company is
trying to decide between two alternative uses of the funds.
The alternatives are as follows:
The working capital needed for project B will be released
for investment elsewhere at the end of nine years. Wriston
Company uses a 10% discount rate. (Ignore income taxes.)
Click here to view Exhibit 11B-1 and Exhibit 11B-2, to
determine the appropriate discount factor(s) using tables.
Calculate net present value for each project. (Negative
amounts should be indicated by a minus sign.Leave no
cells blank - be certain to enter \"0\" wherever required.
Round discount factor(s) to 3 decimal places, other
intermediate calculations and final answers to the nearest
whole dollar.)
Wriston Company has $300,000 to invest. The company is
trying to decide between two alternative uses of the funds.
The alternatives are as follows:
Solution
Hi,
Please find the detailed answer as follows:
NPV is the difference between the present value of cash
outflows and present value of all future cash inflows
including salvage value and recovery of working capital.

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Type your question here Exercise 11-8 Net Present Value Analysis of Two Alternatives [LO1] Wriston Company has $300,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are as follows: The working capital needed for project B will be released for investment elsewhere at the end of nine years. Wriston Company uses a 10% discount rate. (Ignore income taxes.) Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Calculate net present value for each project. (Negative amounts should be ...
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