3. [2 points] The cash flows for two investment projects are given in the below table. Project's Cash Flow ($) n A B 0 -4,500 6,500 1 1,000 -1,400 2 X -1,400 3 1,000 -1,400 4 1,000 -1,400 (a) For Project A, find the value of X that makes the equivalent annual receipts equal the equivalent annual disbursement at i = 15%. (b) For Project A to be preferred over Project B, determine the minimum acceptable value of X in year 2 at i =12% based on an AE criterion. Luces for its current mass-
3. [2 points] The cash flows for two investment projects are given in the below table. Project's Cash Flow ($) n A B 0 -4,500 6,500 1 1,000 -1,400 2 X -1,400 3 1,000 -1,400 4 1,000 -1,400 (a) For Project A, find the value of X that makes the equivalent annual receipts equal the equivalent annual disbursement at i = 15%. (b) For Project A to be preferred over Project B, determine the minimum acceptable value of X in year 2 at i =12% based on an AE criterion. Luces for its current mass-
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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