1) A project has estimated annual net cash flows of $12,500 for eight years and is estimated to cost $42,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

Determine (1) the net present value of the project (if required, round to the nearest dollar) and (2) the present value index (rounded to two decimal places). If required, use the minus sign to indicate a negative net present value.

Qa- Net present value of the project?

Qb- Present value index?

2)

A project is estimated to cost $397,440 and provide annual net cash flows of $54,000 for 10 years.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

Q-Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.____%

3)A project has estimated annual net cash flows of $42,500. It is estimated to cost $263,500.

Q-Determine the cash payback period. If required, round your answer to one decimal place. years

4)Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $83,000 with a $7,000 residual value and a five-year life. The equipment will replace one employee who has an average wage of $30,010 per year. In addition, the equipment will have operating and energy costs of $8,060 per year.

Q-Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent. %