Appendix B Present value of $1, PV, PV = FV = (1+1) Percent Period 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1. 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 3 0.971 0.942 0.915 O.BBS 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 4 0.924 O.BBS 0.855 0.823 0.792 0.763 0.735 0.708 0.6B3 0.659 0.636 5 0.961 0.951 0.942 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 6 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0,460 0.424 0.391 0.361 10 0.905 0.820 0.744 0.676 0.614 0.558 0.50B 0.463 0.422 0.386 0.352 0.322 11 0.896 0.804 0.722 0650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 12 0.387 0.78B 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 15 0.861 0.743 0.642 0.555 0.491 0.417 0.262 0.315 0.275 0.239 0.209 0.183 16 0.726 0.623 0.534 0.45B 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.B5 0.844 17 0.714 0.605 0513 0,436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 18 0.836 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.153 0.130 0.700 0.686 0.180 0.164 0 19 ........ 0828 0570 0479 0.396 0.331 0277 0232 0.194 0.138 0.116 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0215 0.178 0.149 0.124 0.104 25 0.780 0.610 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 30 0.742 0.552 0.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 40 0.672 0,453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 50 0.608 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.005 0.003 Appendix B (concluded) Present value of $1 Percent Period 13% 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 50% 1 0.99s 0.877 0.370 0.862 0.855 0.847 0.840 0.833 0.800 0.769 0.741 0.714 0.667 2 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.640 0.592 0.549 0.510 0.444 3 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.512 0.455 0.406 0.364 0.296 4 0.613 0.592 0.572 0.552 0.534 0.515 0.499 0.482 0.410 0.350 0.301 0.260 0.198 5 0.543 0.519 0.497 0.476 0,456 0,437 0.419 0.402 0.328 0.269 0.223 0.186 0.132 6 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.262 0.207 0.165 0.133 0.088 7 0425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.210 0.159 0.122 0.095 0.059 B 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.16a 0.123 0.091 0.06B 0.039 9 0.333 0.308 0.284 0263 0.243 0.225 0.209 0.194 0.134 0.067 0.048 0.026 10 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.107 0.073 0.050 0.035 0.017 11 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.086 0.056 0.037 0.025 0.012 12 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.069 0.043 0.027 0.018 0.008 13 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.055 0.033 0.020 0.013 0.005 14 0.181 0.160 0.141 0.125 0.111 0.099 0.08 0.078 0.044 0.025 0.015 0.009 0.003 15 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.035 0.020 0.011 0.006 0.002 16 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.028 0.015 0.008 0.005 0.002 17 0.125 0.108 0.093 . 0.069 0.060 0.052 0.045 0.023 0.012 0.006 0.003 0.001 18 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.018 0.009 0.005 0.002 0.001 19 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.014 0.007 0.003 0.002 o 20 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.012 0.005 0.002 0.001 0 25 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.004 0.001 0.001 0 0 30 0.026 0.020 0.015 0012 0.009 0.007 0.005 0.004 0001 0 0 0 0 40 0.00B 0.005 0.004 0.003 0.002 0.001 0.001 0.001 o 0 0 0 50 0.002 0.001 0.001 0.001 0 0 0 0 0 0 0 0 0 Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Project E ($32,000 Investment) Cash Flow 1 $10,000 2 13,000 3 14,000 4 16,000 Project H ($27,000 Investment) Year Cash Flow 1 $15,000 2 13,000 3 11,000 a. Determine the net present value of the projects based on a zero percent discount rate. Net Present Value Project E Project b. Determine the net present value of the projects based on a discount rate of 9 percent. (Do not round intermediate calculations and round your answers to 2 decimal places.) Net Present Value Project E Project H c. If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 9 percent? Project E Project H Both Hand E