(Solution) - Blue Ridge Development Company has two competing projects an ap -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Blue Ridge Development Company has two competing projects: an apartment complex and an office building. Both projects have an initial investment of $720,000. The net cash flows estimated for the two projects are as follows:

The estimated residual value of the apartment complex at the end of year 4 is $420,000.
Determine which project should be favored, comparing the net present values of the two projects and assuming a minimum rate of return of 15%. Use the table of present values in thechapter.