2.

Fielding Hardware is adding a new product line that will require an investment of $1,450,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $320,000 the first year, $270,000 the second year, and $255,000 each year thereafter for eight years. The investment has no residual value. Compute the payback period. First enter the formula, then calculate the payback period. (Round your answer to two decimal places.) Full years + Amount to complete recovery in next year I Projected cash inflow in next year ) = ) = Payback 8.14 years 118000 255000 Use the NPV method to determine whether Mcknight Products should invest in the following projects: Project A costs $270,000 and offers eight annual net cash inflows of $58,000. McKnight Products requires an annual return of 12% on projects like A. Project B costs $375,000 and offers ten annual net cash inflows of $72,000. McKnight Products demands an annual return of 10% on investments of this naturo. (Click the icon to view the present value annuity table.) 5 (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Requirement What is the NPV of each project? What is the maximum acceptable price to pay for each project? Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV of Project Aiss i Reference i Reference Periods Periods 16% 0.662 1.605 2.244 2.799 3.274 18% 0.847 18% 0 847 1.566 2.174 2.890 3.127 16% 0.832 0.743 0.641 3% 0.971 0.943 0.915 0.898 0863 0.837 0.813 4% 0.962 0.925 0.889 0.865 0.822 0.790 0.760 Present Value of $1 5% 6% 8% 10% 0.952 0.943 0.926 0.909 0.907 0.890 0.857 0.826 0.864 0.840 0.794 0.751 0.923 0.792 0.735 0.683 0.784 0.747 0.681 0.621 0.746 0.705 0.630 0.564 0.711 0.665 0.593 0.513 20% 0.833 1.528 2. 106 2509 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 12% 0.093 0.797 0.712 0.538 0.567 0.507 0.452 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 20% 0.833 0.694 0.579 0.482 0.402 3.498 5700 5.592 5206 0.853 6210 6.483 0.789 62 0.731 Present Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 0.990 0.980 0.971 0.562 0.952 0.943 0.926 | 0.909 0.893 0.877 1.970 1.942 1.913 1.686 1.959 1.833 1.783 1.736 1.6901.647 2.9412.884 2.829 2.775 2.723 2.673 2577 2487 2402 2.322 3.902 3.806 3.717 3.630 3.546 3.485 3.312 3.170 3.037 2.914 4.713 4.580 4.452 4329 4.2123903 3.791 3 ANS 3.433 5.601 5.417 5.242 5.076 4.917 4.623 4.356 6.728 6.472 8.230 6.002 4.968 4.584 7.652 7.3257.020 8.566 8. 162 7.786 7.435 6.802 6247 5.759 9.471 B.983 9.530 8.111 7.360 6.710 5.650 10.363 9.787 9.253 8.760 8.306 7.139 11.255 10.575 9.954 9.3856.063 8.304 7.536 6.914 12.134 11.348 10.635 9.988 9.394 8.853 7.904 7.103 6.424 5.842 13.004 12.106 11.298 10.563 9.899 9.295 8.244 7.367 6.628 6.002 13.865 12.849 11.939 11.118 10.380 9.712 8.559 7.606 6.911 6.142 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 6.623 22.023 | 19.523 17.413 15.622 14.094 12.783 10.875 9,077 7.8436.873 25.808 22 396 19.600 17.292 15.372 13.765 11.258 9.427 B.055 7.003 32.835 27 355 23.115 19.793 17.159 15.046 11.925 9.779 | 8.244 7.105 2.100 1122 1% 2% 0.990 0.900 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 0.9420.888 0.933 0.871 0.923 0.914 0.837 0.905 0.920 0.896 0.667 0.879 0.773 0.670 0.758 0.861 0.743 0.820 0.673 0.780 0.610 0.742 0.552 0.672 0.453 6.145 0.766 0.744 0.722 0.614 6.495 Dodaci 0708 4,533 4.611 0.703 0.676 0.650 0.625 0.601 0.577 0.565 0.456 0.375 0.309 0.208 4.675 15 5.575 5.929 6.097 6.177 6.283 0.051 0.601 0.642 0.554 0.478 04412 0.307 5.353 5.467 5.517 5.548 25 4.870 4.948 4.979 4.997 0.481 0.377 0.295 0.231 0.142 0.312 0.233 0 174 0.097 0.315 0.215 0.146 0.099 0.046 0.239 0.149 0.092 0.057 0.022 0.183 0.104 0.059 0.033 0.011 0.073 0.038 0.020 0005 0.012 0.003 40 40 0.001 Print Dong Print Done Future Value of Annuity of $1 Periods 1% 1.000 2.010 3.030 4.060 5.101 ovo own 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 6.152 7.214 8.286 9.369 10.462 6.468 7.662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14.240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 M di 11.567 12.683 13.809 14.947 16.097 12.808 14.192 15.618 17.086 18.599 13.486 15.026 16.627 18.292 20.024 14.207 15.917 17.713 19.599 21.579 33.066 47.727 66.439 120.800 14.972 16.870 18.882 21.015 23.276 36.786 54.865 79.058 154.762 16.645 18.977 21.495 24.215 27.152 45.762 73.106 113.283 18.531 21.384 24.523 27.975 31.772 20.655 23.045 24.133 27.271 28.029 32.089 32.393 37.581 37.280 43.842 72.052 91.025 133.334 181.871 241.333 356.787 | 767.091 | 1,342.025 25.733 30.850 36.786 43.672 51.660 28.755 32.150 34.931 39.581 42.219 48.497 50.818 59.196 60.965 72.035 146.628 186.688 342.603 471.981 790.948 | 1,181.882 4,163.213 7,343.858 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 26.870 36.459 47.575 75.401 29.778 41.646 56.085 95.026 57.275 98.347 164.494 | 442.593 115.380 249.214 530.312 2,360.757 Periods 1% 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 10% 1.100 1.210 1.331 1.464 1.611 5% 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 1.126 Doop voor 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 1.539 1.601 1.665 1.732 1.801 2.191 2.666 3.243 4.801 Future Value of $1 6% 8% 1.060 1.080 1.124 1.166 1.191 1.260 1.262 1.360 1.338 1.469 1.419 1.587 1.504 1.714 1.594 1.851 1.689 1.999 1.791 2.159 1.898 2.332 2.012 2.518 2.133 2.720 2.261 2.937 2.397 3.172 3.207 4.661 4.292 6.848 5.743 10.063 10.286 21.725 1.772 1.949 2.144 2.358 2.594 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 1.974 2.211 2.476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.710 1.796 1.886 1.980 2.079 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188.884 2.853 3.138 3.452 3.797 4.177 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85.850 378.721 6.176 7.288 8.599 10.147 11.974 27.393 62.669 143.371 750.378 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.653 3.386 4.322 7.040 6.727 10.835 17.449 45.259 9.646 17.000 29.960 38.338 95.396 237.376 1,469.772