Figure 14-9. Kenner Company is considering two projects.
Present value of an Annuity of $1 in Arrears
Refer to Figure 14-9.Suppose that Kenner Company requires a minimum rate of return of 8 percent.Which project is better in terms of net present value?

Question

Figure 14-9. Kenner Company is considering two projects.
 Present value of an Annuity of $1 in Arrears
 Refer to Figure 14-9.Suppose that Kenner Company requires a minimum rate of return of 8 percent.Which project is better in terms of net present value?

Quizplus · Accepted Answer

Project A has a higher NPV of $10,585, which is greater than the required minimum rate of return of 8 percent. Therefore, Project A is the better choice in terms of net present value.

Figure 14-9. Kenner Company Is Considering Two Projects