Question

Dixie Dynamite Company is evaluating two methods of blowing up old buildings for commercial purposes over the next five years. Method one (implosion) is relatively low in risk for this business and will carry a 10 percent discount rate. Method two (explosion) is less expensive to perform but more dangerous and will call for a higher discount rate of 14 percent. Either method will require an initial capital outlay of $97,000. The inflows from projected business over the next five years are given next.

Answer 1

This question is about the evaluation of two methods for blowing up old buildings for commercial purposes, looking at the financial aspects such as capital outlay, discount rates, and projected inflows.

Step-by-step explanation:

In this question, the subject is business. The question is about an evaluation of two methods of blowing up old buildings for commercial purposes.

The two methods are implosion and explosion, and the company, Dixie Dynamite Company, is considering the financial aspects of these methods. The question provides information about the initial capital outlay, discount rates, and projected inflows over the next five years.