Appendix B Present value of $1. PVE Period 7% 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372 3% 0.971 0.943 0.915 0.BBB 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0.307 0.228 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 0.208 0.141 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.296 0.231 0.142 0.087 Percent 6% 0.943 0.935 0.890 0.873 0.840 0.816 0.792 0.763 0.747 0.713 0.705 0.666 0.665 0.623 0.627 0.582 0.592 0.544 0.568 0.508 0.527 0.475 0.497 0.444 0.469 0.415 0.442 0.388 0.417 0.362 0.394 0.339 0.371 0.317 0.350 0.296 0.331 0277 0.312 0.258 0.233 0.184 0.174 0.131 0.097 0.067 0.054 0.034 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.146 0.099 0.046 0.021 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0.032 0.013 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.00 0.057 0.022 0.009 11% 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 Q.170 0.153 0.138 0.124 0.074 0.044 0.015 0.005 oara 8 6 8 8 8 Appendix B (concluded) Percent 13% 14% 18% 25% 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0323 0.295 0.261 0231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0. 0.047 0.026 0.008 0.002 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.005 0.083 0.073 0.000 0.020 0.005 0.001 15% 16% 0.870 0.862 0.756 0.743 0.658 0.641 0.572 0.552 0.497 0.476 0.432 0.410 0.376 0.354 0.327 0.305 0.284 0.263 0.247 0.227 0.215 0.195 0.187 0.168 0.163 0.145 0.141 0.125 0.123 0.108 0.107 0.093 0.093 0.080 0.081 0.069 0.0700.000 0.001 0.051 0.030 0.024 0.015 0.012 0.004 0.003 0.001 0.001 17% 0.855 0.731 0.624 0.534 0.456 0.390 0.333 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.096 0.081 0.000 0.059 0.051 0.043 0.020 0.000 0.002 0 0.847 0.718 0.609 0.515 0.437 0.370 0314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.016 0.007 0.001 19% 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0,052 0.014 0.037 0.031 0.013 0.005 0.001 20% 0.833 0.694 0.579 0.482 0.402 0.336 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 Dons 0.054 0.045 0038 0.031 0.025 0.010 0.004 0.001 0.800 0.640 0.512 0.410 0.328 0.212 0.210 0.168 0.134 0.107 0.088 0.069 0.055 0.044 0.005 0.028 0.023 0.018 0.014 0.012 0.004 0.001 0 0 30% 35% 40% 50% 0.769 0.741 0.714 07 0.549 0.510 0.444 0.455 0.406 0.364 0.296 0.350 0.301 0.260 0.198 0269 0.223 0.186 0.132 0.207 0.165 0.133 0.088 0.159 0.122 0.096 0.059 0.123 0.001 0.068 0.039 0.094 0.067 0.048 0.028 0.073 0.050 0.035 0.017 0.056 0.037 0.025 0.012 0.043 0.027 0.018 0.008 0.033 0.0200.013 0.005 0.025 0.015 0.009 0.003 0.020 0.01 0.008 0.002 0,015 0.008 0.005 0.002 0.0120.000 0.003 0.001 0.009 0.005 0.002 0.001 0.007 0.003 0.002 0.005 0.002 0.001 0 0.001 0.001 0 0 0 0 0 O 0 $8 8 0 X-treme Vitamin Company is considering two investments, both of which cost $44,000. The cash flows are as follows: Year Project A $46,000 17.000 13,000 Project B $44.000 18.000 15,000 3 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Payback Period year's Project A years a-2. Which of the two projects should be chosen based on the payback method? Project A Project B b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediat Net Present Value Project A Project B 0. Project B Project A c. Should a firm normally have more confidence in the payback method or the net present value method? Net present value method Payback method