Question

1)The college of Staten island company must decide between two mutually exclusive industrial printers. The cost of each printer is $6,750, and each has an expected life of 3 years. Annual projected cash flows for each printer are as follows:

Answer 1

Answer and Explanation:

1                                                                  

Expected cash flow for the project  

Project A                                                            

sum (Probability*CF)

(6000*20%)+(6750*60%)+(7500*20%)  

= 6750

project B

(20%*0)+(60%*6750)+(20%*18000)

=  7650