Appendix A,B,D respectively

Problem 22-04 A firm has the following investment alternatives: Cash Inflows Year A B 1 $3,585 2 3 $1,175 1,175 1,175 $4,265 Each investment costs $7200; investments Bend Care mutually exclusive, and the firm's cost of capital is 8 percent. Use Appendix A, Appendix B and Appendix D to answer the questions Assure that the investments are not mutually exclusive and there are no budget restrictions. a. What is the net present value of each investment? Use a minus sign to enter a negative values, if any, Round your answers to the nearest dollar A: $ B: $ C: 5 b. According to the net present values, which investment(s) should the firm make? The firm should make investment(s) C c. What is the internal rate of return on each investment? Round your answers to the nearest whole number A ? d. According to the internal rates of return, which investment(s) should the firm make? The firm should make investment(o) B e. According to both the net present values and internal rates of return, which investments should the firm make? The net present value and internal rate of return lead to different decisions so the firm should resolve the conflict between Band C f. If the firm could reinvest the $3,585 earned in year 1 from investment B at 9 percent, which investment(s) should the firm make? Round your answer to the nearest dollar. Terminal value of investment B: $ The firm should make investment(s) C Would the answer be different of the rate were 10 percent? Round your answer to the nearest doltar. Terminal value of investment B: $ The firm should make investment B . If the firm's cost of capital had been 9 percent, what would be investment As internal rate of return? Round your answer to the nearest whole number h. The payback method of capital budgeting selects which investment? The payback method of capital budgeting selects investment B Interest Factors for the Future Value of One Dollar Time Period 2 3 4 S 5% EX 1.010 1.020 1030 1040 1.050 1.060 1.070 1.020 1.040 1061 1.082 1.102 1.124 1.145 1.030 1061 1.093 1.125 1.158 1.191 1.225 1.041 1.082 1.126 1.170 216 1.262 1311 1.051 1.104 1.159 1.217 1.276 1.338 1,403 1.080 1.166 1.260 1.360 1.469 9% 1.090 1.188 1.295 1.412 539 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1254 1.405 1.574 1.762 1.140 1.300 1.482 1.689 1.925 15% 1.150 1.322 1.521 1.749 2.011 16% 1.160 1.346 1561 1.811 2.100 18% 1.180 1.392 1.643 1939 2.288 20% 1.200 1.440 1.728 2.074 2.488 6 7 8 9 10 1.062 1.126 1.194 1.265 1.340 1.419 1.501 1.072 1.149 1.230 1.316 1.407 1.504 1.606 1.083 1.172 1.267 1.369 1,477 1.594 1.718 1,094 1.195 1305 1.423 1.551 1.689 1.838 1.105 1.219 1.344 1.480 1.629 1.791 1.967 1.587 1.714 1.851 1.999 2.159 1677 1.828 1.993 2.172 2.367 1.772 1.949 2.144 2.358 2.594 1974 2.211 2.476 2.773 3.106 2.195 2502 2.853 3.252 2.313 2.660 3.059 3.518 4,046 2.436 2.826 3.278 3.803 4.411 2.700 3.186 3.759 4,436 5.234 2986 3.583 4.300 5.160 6.192 3.707 11 12 13 14 15 1.116 1.243 1.384 1.539 1.710 1.898 2.105 1.127 1268 1.426 1601 1.796 2.012 2.252 1.138 1.294 1.469 1665 1.886 2.133 2.410 1.149 1.319 1513 1.732 1.980 2.261 2.579 1.161 1346 1.558 1.801 2.079 2.397 2.759 2.332 2.518 2.720 2.937 3.172 2.580 2.813 3.066 3.342 3.642 2.853 3.479 3.138 3.896 3.452 4.363 3.797 4.887 4.177 5.474 4.226 4.818 5.492 6.261 7.138 4.652 5.350 6.153 7.076 8.137 5.117 5.936 6.886 7.988 9.266 6.176 7.287 8.599 10.147 11.973 7.430 8.916 10.699 12.839 15.407 16 17 18 19 20 1.173 1373 1605 1.873 2.183 2540 2.952 1.184 1.400 1.653 1.948 21292 2.693 3.159 1.196 1.428 1.702 2.026 2.407 2.854 3.380 1208 1.457 1754 2.107 2.527 3.026 3.617 1.220 1.486 5.806 2.191 2.653 3.207 3.870 3.426 3.700 3.996 4.316 4.661 3.970 4.328 4.717 5.142 5.604 4.595 5.054 5.560 6.116 6.728 6.130 8.137 9.358 10.748 6.866 9.276 10.761 12.468 7.690 10.575 12 375 14.463 8.613 12.056 14.232 16.777 9.646 13.743 16.367 19.461 14.129 16.672 19.673 23.214 27.393 18.488 22.186 26.623 31.948 38.337 25 1.282 1.611, 2.094 2.666 3.386 4.292 5.427 6.848 8.623 10.835 17.000 26.462 32.919 40.874 62.688 95.396 30 1.348 1.811 2.427 3.243 4.322 5.743 7.612 10.063 13.268 17.449 29.960 50 950 66.212 85.850 143.370 237.370 Interest Factors for the Present Value of One Dollar Time Period 9 WN- * , 146 5 2 12 99 Interest Factors for the Present Value of an Annuity of One Dollar Period 1 2 3 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 28% 32% 36% 0.990 0.980 0,971 0962 0.952 0.943 0935 0.926 0.917 0909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1970 1942 1913 1886 1859 1833 1808 1.783 1.759 1736 1690 1647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2829 2.775 2.723 2673 2624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1981 1.868 1.766 1674 3902 3.808 3.717 3630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2589 2.404 2.241 2.096 1966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.9933.890 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 5242 5.076 4.917 4.766 4.623 4.486 4355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2399 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 2937 2.678 2.455 7.652 7325 7020 6.733 6.463 6.210 597) 5.7475.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7435 7108 6.802 6.515 6.247 5.985 5.759 5328 4946 4,607 4.303 4.031 3.566 3.184 2.868 2.603 9.471 8.983 8.530 8.111 7722 7360 7024 6.710 6.418 6.145 5.6505.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 6 7 8 9 10 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 3387 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 4910 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 8.060 7606 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 7824 6.974 6.265 5,669 5.162 4.730 4.003 3503 3.088 2.758 17 15562 14.292 13.166 12 166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5749 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 9372 8.756 8.201 7.250 6.467 5.818 5.273 4,812 4080 3.529 3.104 2767 19 17.226 15.678 14 324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 2018.046 16 351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.022 19.522 17,413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4948 4.147, 3564 3.122 2.776 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 5517 4979 4.160 3.569 3.124 2.778