#5

Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $228,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and AVA of $1) YUse appropriate factor(s) from the tables provided.) Net cash flows Year 1 Year 2 Year 3 Project C1 $ 12,000 108,000 168,000 $ 288,000 Project C2 $ 96,000 96,000 96,000 $ 288,000 Totals a. The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 12% for () Project C1 and (ii) Project C2? Complete this question by entering your answers in the tabs below. Required A Required B recent values using factors from Table B. 1 in Required A Required B The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar. Project C1 Initial Investment Chart Values are Based on: i = % Year Cash Inflow X PV Factor Present Value Year 1 Year 2 Year 3 Project 02 Initial Investment Year Cash Inflow X PV Factor Present Value Year 1 Year 2 Year 3 Initial investment Net present value Present value of cash inflows Year Cash Inflow PV Factor Present V Year 1 = Year 2 Year 3 Required A Required B Using the answer from part a, is the internal rate of return higher or lower than 12% for (i) Project C1 and (ii) Project C2? (i) is the internal rate of return higher or lower than 12% for Project C1?. (ii) is the internal rate of return higher or lower than 12% for Project C2