Problem 22-09 Management of a firm with a cost of capital of 7 percent is considering a $105,000 investment with annual cash flow of $40,740 for three years. Use Appendix A and Appendix D to answer the questions. a. What are the investment's net present value and internal rate of return. Use a minus sign to enter a negative valutany Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number NPV: 5 b. The internal rate of return assumes that each cash flow is revested at the internal rate of return. If that investment rate is achieved what is the total value of the cash flows at the end of the third year? Use the rounded internal rate of return from part a Round your answer to the nearest dollar c. The net present value technique assumes that each cash flow is renvested at the firm's cost of capital, what would be the total value of the cash flows at the end of the third year if the funds are renvested at the firm's cost of capital Round your answer to the nearest delar Interest Factors for the Future Value of One Dollar Time Period (e.g. year) 1 2 3 4 5 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 1 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.102 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 7% 1.070 1.145 1.225 1.311 1.403 8% 1.080 1.166 1.260 1.360 1.469 9% 1.090 1.188 1.295 1.412 1.539 10% 1.100 1.210 12% 1.120 1.254 14% 1.140 1.300 15% .150 1.322 16% 1.160 1.346 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 1.464 1.611 1.574 1.762 1.689 1925 1.749 2.011 1.811 2.100 6 7 8 9 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.501 1.504 1.606 1.594 1.718 1.689 1.838 1.791 1.967 1.587 1.714 1.851 1.999 2.159 1.677 1.828 1.993 2.172 2.367 1.772 1.949 2.144 2.358 2.594 1.974 2.1952.313 2.211 2.502 2.660 2.476 2.853 3.059 2.7733.252 3.518 3.106 3.707 4.046 2.436 2.826 3.278 3.803 2.700 3.186 3.759 4,436 5.234 2.986 3.583 4300 5.160 6.192 11 12 13 14 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 1.898 2.105 2.012 2.252 2.133 2.410 2.261 2.579 2.397 2.759 2.332 2.518 2.720 2.937 3.172 2.580 2.813 3.066 3.342 3.642 2.8533.479 3.138 3.896 3.452 4.363 3.797 4.887 4.177 5.474 4.226 4,652 4.818 5.350 5.492 6.153 6.2617 076 7.138 8.137 5.117 5.936 6.886 7988 9.266 6.176 7.287 8.599 10.147 11.973 7430 8.916 10699 12.839 15.407 16 17 18 19 20 1.173 1.184 1,196 1.208 1.220 1.373 1.400 1.428 1.457 1.486 1.605 1.873 1.653 1.948 1.702 2.026 1.754 2.107 1.806 2.191 2.183 2.292 2.407 2.527 2.653 2540 2.952 2.693 3.159 2.854 3.380 3.026 3.617 3.207 3.870 3.426 3.700 3.996 4.316 4661 3.9704.595 4.328 5.054 4.717 5.560 5.1426.116 5.6046.728 6.130 6.866 7690 8.613 9.646 8.137 9.276 10.575 12.056 13.743 9.358 10.748 10.761 12.468 12.375 14.463 14.232 16.777 16.367 19.461 14.129 18.488 22.186 19.673 26.623 23.214 31.948 27.39338 337 251.282 1.641 301.348 1.811 2.094 2.666 3.386 4.292 5.427 2.427 3.243 4.3225743 7612 6.848 8.623 10.835 17.000 26.462 32.919 40.874 62.688 10.063 13.268 17449 29.960 50.950 66.212 85.850 143.370 95.396 237.370 Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e. year) 1% 2% 3% 4% 5% 6% 7 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 324 325 0.990 0.980 0.971 0.962 0.952 0.943 0935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0735 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 3 2.941 2.884 2.829 2.775 1332 1.276 2.723 2.673 2.624 2.577 2531 2.487 2402 2.322 2.246 2.174 2.106 1981 1.868 1766 1674 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2690 2589 2.404 2741 2.096 1966 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2991 2.745 2.532 2.345 2.181 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2759 2.534 2.399 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2678 2.455 8 7.652 7.325 7,020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2540 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3,061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.00 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9,447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.2017.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 1917.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7366 6.550 5877 5.316 4.844 4,097 3.599 3.109 2.770 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9,427 8.055 7003 6.177 5.512 4979 4160 3569 3.124 2.778
