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answer all requirements asap will give thumbs up E Homework: Chapter M:9 Homework Question 4, EM9-25 (sim... Part 2 of 6 HW Score: 80%, 4
answer all requirements asap
will give thumbs up
E Homework: Chapter M:9 Homework Question 4, EM9-25 (sim... Part 2 of 6 HW Score: 80%, 4 of 5 points Points: 0.25 of 1 0 Save Use the NPV method to determine whether Rouse Products should invest in the following projects: Project A: Costs $290,000 and offers seven annual net cash inflows of $56.000. Rouse Products requires an annual return of 12% on investments of this nature. Project B: Costs $380,000 and offers 10 annual net cash inflows of $71,000. Rouse Products demands an annual return of 10% on investments of this nature. (Click the icon to view Present Value of $1 table.) S1 . (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor arounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) . a Caculate the NPV inet present value) of each project. Begin by calculating the NPV of Project A. Project A: x Net Cash Annuity PV Factor Present Requirements Years Inflow (l=12%, ne7) Value 1-7 Present value of annuity $ 56.000 4.564 $ 255,584 1. What is the NPV of each project? Assume neither project has a residual 0 Investment (290,000) value. Round to two decimal places $ (34,416) Net present value of Project A 2. What is the maximum acceptable price to pay for each project? 3. What is the profitability index of each project? Round to two decimal places. Calculate the NPV of Project B. Net Cash Annuity PV Factor Project B: Years Present Value Inflow (i=10%, n=10) Print Done 1 - 10 Present value of annuity 0 Investment Net present value of Project B Help me solve this Etext pages Get more help Clear all Show work CheckStep by Step Solution
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