2. Net present value. Independent projects Using a 14% cost of capital, calculate the net present value for each of the independent projects shown in the following table, and indicate whether each is acceptable. 4 5 6 7 8 9 10 11 Project A Initial investment $26,000 Year 1 $4,000 2 4,000 3 4,000 4 4,000 5 4,000 6 4,000 7 4,000 8 4,000 9 4,000 10 4,000 Project B Project C Project D Project E $500,000 $170,000 $950,000 $80,000 Cash inflows $100,000 $20,000 $230,000 $- 0 120,000 19,000 230,000 0 140,000 18,000 230,000 -0 160,000 17.000 230,000 20,000 180,000 16,000 230,000 30,000 200,000 15,000 230,000 -0 14,000 230,000 50,000 13,000 230,000 60,000 12,000 70,000 11,000 12. 13 14 15 16 17 18 19 Solution E F G H 21 22 23 C D Project A Discount rate Number of years CFO CF1-10 PV of cash inflows NPV of project A The project will be 14% 10 -$26,000 $4,000 24 25 26 27 28 29 30 31 32 33 34 Project B Discount rate CFO CF1 CF2 CF3 CF4 CF5 CF6 PV of cash inflows NPV of project B 14% -$500,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 35 36 37 38 39 40 Thepinillo 40 NPV of project B The project will be 41 42 43 44 45 46 47 48 49 Project C Discount rate CFO CF1 CF2 CF3 CF4 CF5 CF6 CF7 CF8 CF9 CF10 PV of cash inflows NPV of project The project will be 14% -$170,000 $20,000 $19,000 $18,000 $17,000 $16,000 $15,000 $14,000 $13,000 $12,000 $11,000 50 51 52 53 54 55 56 57 58 59 E F G H 14% 8 -$950,000 $230,000 AB D 60 Project D 61 Discount rate 62 Number of years 63 CFO 64 CF1-8 65 PV of cash inflows 66 NPV of project D 67 The project will be 68 69 Project E 70 Discount rate 71 CFO 72 CF1 73 CF2 74 CF3 75 CF4 76 CF5 77 CF6 78 CF7 79 CF8 14% - $80,000 $-0 $-0 $-0 $20,000 $30,000 $-0 $50,000 $60,000 D H 80 81 83 Points 1 87 AB E F G CF9 $70,000 PV of cash inflows 82 NPV of project E The project will be 84 85 86 Requirements 1 In cell E26, by using cell references to the given data and the function PV, calculate the present value of the cash inflows for project A. Note: The result of your calculation is expected as a positive answer. 2 In cell E27, by using cell references to the given data, calculate the net present value for 3 In cell E28, type either accepted or rejected based on your calculation of the project's 4 In cell E39, by using cell references to the given data and the function NPV, calculate the present value of the cash inflows for project B. 5 In cell E40, by using cell references to the given data, calculate the net present value for 6 In cell E41, type either accepted or rejected based on your calculation of the project's 7 In cell E56, by using cell references to the given data and the function NPV, calculate the present value of the cash inflows for project C. 8 In cell E57, by using cell references to the given data, calculate the net present value for 9 In cell E58, type either accepted or rejected based on your calculation of the project's 88 89 1 1 1 90 91 92 1 1 1 93 94 95 1 1 AB progla, E. 94 95 1 1 1 96 97 E G H Pewn vurac UL UL C MOWS II Put U. 8 In cell E57, by using cell references to the given data, calculate the net present value for 9 In cell E58, type either accepted or rejected based on your calculation of the project's 10 In cell E65, by using cell references to the given data and the function PV, calculate the present value of the cash inflows for project D. Note: The result of your calculation is expected as a positive answer. 11 In cell E66, by using cell references to the given data, calculate the net present value for 12 In cell E67, type either accepted or rejected based on your calculation of the project's 13 In cell E81, by using cell references to the given data and the function NPV, calculate the present value of the cash inflows for project E. 14 In cell E82, by using cell references to the given data, calculate the net present value for 15 In cell E83, type either accepted or rejected based on your calculation of the project's 16 Save the workbook. Close the workbook and then exit Excel. Submit the workbook as 99 1 1 1 99 100 1 1 101 102 103 104 105 106 107 108 109 110 112