Question Content Area There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $31,500   $22,500     $5,000   $59,000 Beta Project 7,000   23,000     28,000   58,000 (Click here to see present value and future value tables) A. If the discount rate is 12%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $fill in the blank 1 Beta Project $fill in the blank 2 B. Which project should be recommended.   .Please round off anwsers. Thank you

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
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    There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows:

      First Year Second Year Third Year Total
    Alpha Project $31,500   $22,500     $5,000   $59,000
    Beta Project 7,000   23,000     28,000   58,000

    (Click here to see present value and future value tables)

    A. If the discount rate is 12%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places.

    Alpha Project $fill in the blank 1
    Beta Project $fill in the blank 2

    B. Which project should be recommended.

     

    .Please round off anwsers. Thank you

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