This homework submission should include all calculations for part (a), completed on the designated tab of the Homework Student Workbook, and a document explaining the implications of your findings for the business or business transaction. After reading the assigned chapters, respond to the following:
You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projects’ expected net cash flows are shown in the table below.
Expected Net Cash Flows
Year |
Project X |
Project Y |
0 |
– $10,000 |
– $10,000 |
1 |
6,500 |
3,500 |
2 |
3,000 |
3,500 |
3 |
3,000 |
3,500 |
4 |
1,000 |
3,500 |
For additional details, please refer to the Homework Guidelines and Rubric document in the Assignment Guidelines and Rubrics section of the course.