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Question(s) / Instruction(s):

 Simms Manufacturing is considering two alternative investment proposals with the following data

                                                                      Proposal X         Proposal Y

Investment                                                          $620,000      $400,000

Useful life                                                             8 years           8 years

Estimated annual net cash inflows for 8 years       $130,000         $80,000

Residual value                                                       $60,000             $0

Depreciation method                                          Straight-line        Straight-line

Required rate of return                                              14%               10%

Note: Present value tables are needed.

What is the net present value of Proposal X? 

A             $3,070 positive

B             $4,130 positive

C             $3,070 negative

D             $4,130 negative

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