B. Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A costs $280,000 and offers eight annual net cash inflows of $56,000. Vargas Products requires an annual return of 16% on projects like A. Project B costs $380,000 and offers nine annual net cash inflows of $74,000. Vargas Products demands an annual return of 12% on investments of this nature. (Click the icon to view the present value annuity table.) 2(Click the icon to view the present value table.) *(Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Requirement What is the NPV of each project? What is the maximum acceptable price to pay for each project? Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV of Project A is $ The NPV of Project B is $ Now calculate the maximum acceptable price to pay for each project. (Round your answers to the nearest whole dollar.) Project A is $ Project B is $ 1: Reference Present Value of Annuity of $1 Periods 2 16% 0.862 1.605 2.246 2.798 3.274 3.685 18% 0.847 1.566 2.174 2.690 20% 0.833 1.528 2.106 2.589 2.991 3.717 3.127 3.498 4.039 1% 2% 3% 4% 0.990 0.980 0.971 0.962 1.970 1.942 1.913 | 1.836 2.941 2.884 2.829 2.775 3.902 3.808 3.630 4.853 4.713 4.580 4.452 5.795 5.601 5.417 5.242 6.728 6.472 6.230 6.002 7.652 7.325 7.020 6.733 8.566 8.162 7.786 7.435 9.471 8.9838.530 8.111 10.368 | 9.787 9.253 8.760 11.255 10.575 9.954 9.385 12.134 11.348 10.635 | 9.986 13.004 12.106 11.296 10.563 13.865 12.849 11.938 11.118 18.046 16.351 14.877 13.590 22.023 19.523 17.413 15.622 25.808 22.396 19.600 17.292 32.835 27.355 23.115 19.793 5% 6% 8% 10% 12% 14% 0.952 0.943 0.926 0.909 0.893 0.877 1.859 1.833 1.783 1.736 1.690 1.647 2.723 2.673 2.577 2.487 2.402 2.322 3.546 3.465 3.312 3.170 3.037 2.914 4.329 4.212 3.993 3.791 3.605 3.433 5.076 4.917 4.623 4.355 4.111 3.889 5.786 5.582 5.206 4.868 4.564 4.288 6.463 6.210 5.747 5.335 4.968 4.639 7.108 6.802 6.247 5.759 5.328 4.946 7.722 7.360 6.710 6.145 5.650 5.216 8.306 7.887 7.139 6.495 5.938 5.453 8.863 8.384 7.536 6.814 6.194 5.660 9.394 8.853 7.904 7.103 6.424 5.842 9.899 9.295 8.244 6.628 6.002 10.380 9.712 8.559 7.606 6.811 6.142 12.462 11.470 9.818 8.514 7.469 6.623 14.094 12.783 10.675 9.077 7.8436.873 15.372 13.765 11.258 | 9.4278.055 7.003 17.159 15.046 11.925 9.779 | 8.244 7.105 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.929 3.326 3.812 3.605 4.078 3.837 4.303 4.031 | 4.494 4.192 4.656 4.327 4.439 4.533 5.00 4.611 5.092 4.675 5.353 4.870 5.467 4.948 5.517 | 4.979 5.548 4.997 7.367 6.097 6.177 6.233 40 Present Value of $1 Periods 1 0 1% .990 0.980 0.971 0.961 4% 0.962 0.925 0.889 0.855 3% 0.971 0.943 0.915 0.888 0.863 0.837 5% 0.952 0.907 0.864 0.823 16% 0.862 0.743 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.641 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 10% 0.909 0.826 0.751 0.683 0.621 18% 0.847 0.718 0.609 0.516 0.437 0.951 0.942 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.813 0.513 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.789 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 0.215 0.146 0.099 0.046 0.627 0.467 0.592 0.558 0.266 0.225 0.191 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.026 0.010 0.004 0.001 0.722 0.701 0.527 0.195 0.497 0.469 0.168 0.137 0.687 0.229 0.145 75 0.442 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.149 0.092 0.057 0.022 0.661 0.642 0.160 0.417 0.673 0.205 0.183 0.104 0.059 0.033 0.011 0.554 0.478 0.412 0.125 0.108 0.051 0.024 0.012 0.003 0.610 0.552 0.453 0.375 0.308 0.208 0.742 0.672 0.140 0.073 0.038 0.020 0.005 0.295 0.231 0.142 0.233 0.174 0.097 0.084 0.037 0.016 0.007 0.001 0.307 3: Reference Future Value of Annuity of $1 Periods 8% 1.000 2.080 3% 1.000 2.030 3.091 4.184 5.309 12% 1.000 2.120 3.374 4.779 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 16% 1.000 2.160 3.506 5.066 14% 1.000 2.140 3.440 4.921 6.610 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 22.019 28.243 34.785 48 886 6% 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11.491 13.181 6.353 6.877 10% 1.000 2.100 3.310 4.641 6.105 7.716 9.487 11.436 13.579 15.937 1.000 2.040 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 18.292 20.024 29.778 41.646 56.085 95.026 5% 1.000 2.050 3.153 4.310 5.526 6.802 8.142 9.549 11.027 12.578 14.207 15.917 17.713 19.599 21.579 33.066 47.727 66.439 120.800 3.246 4.506 5.867 7.336 8.923 10.637 12.488 14.487 8.536 10.730 13.233 16.085 8.115 10.089 12.300 14.776 17.549 6.468 7.662 8.892 10.159 11.464 12.80B 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 19.337 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 18% 20% 1.000 1.000 2.180 2.200 3.572 3.640 5.215 5.368 7.154 7.442 9.442 9.930 12.142 12.916 15.327 16.499 19.086 20.799 23.521 25.959 28.755 32.150 34.931 39.581 42.219 48.497 50.818 59.196 60.965 72.035 146.628 186.688 342.603 471.981 790.948 1,181.882 4,163.213 7,343.858 14.972 16.870 18.882 21.015 23 276 16.645 18.977 21.495 24.215 27.152 45.762 73.106 113.283 259.057 18.531 21.384 24.523 27.975 31.772 57.275 98.347 164.494 442.593 20.655 24.133 28.029 32.393 37.280 72.052 133.334 241.333 767.091 8.977 11.414 14240 17.519 21.321 25.733 30.850 36.786 43.672 51.660 115.380 249.214 530.312 2,360.757 23.045 27.271 32.089 37.581 43.842 91.025 181.871 356.787 1,342.025 36.786 54.865 79.058 154.762 4: Reference Future Value of $1 Periods 2% 3% 6% 8% 10% 14% 18% 20% 1.010 1.020 1.030 1.041 1.051 1.062 1.072 1.083 1.020 1.040 1.061 1.082 1.104 1.030 1.061 1.093 1.126 1.159 1.040 1.082 1.125 1.170 1.217 1.080 1.166 1.260 1.360 1.469 1.140 1.300 1.482 1.689 1.925 16% 11.160 1.346 1.561 1.811 2.100 1.180 1.392 1.643 1.939 2.288 1.200 1.440 1.728 2.074 2.488 Succvon AwN- 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 1.126 1.149 1.172 1.195 1.194 1.230 1.267 1.305 1.344 5% 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 1.710 1.796 1.886 1.980 2.079 1.100 1.210 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 2.195 2.502 2.853 3.252 3.707 12% 1.120 1.254 1.405 1.574 1.762 1.974 2.211 2.476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 2.436 2.826 3.278 3.803 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 1.265 1.316 1.369 1.423 1.480 1.539 1.601 1.665 1.732 1.801 1.094 1.105 1.219 1.587 1.714 1.851 1.999 2.159 2.332 2.518 2.720 2.937 3.172 4.411 1.116 1.127 1.138 1.149 1.161 1.220 1.282 1.348 1.489 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.898 2.012 2.133 2.261 2.397 3.207 4.292 5.743 | 10.286 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 1.558 1.486 1.641 1.811 1.806 2.094 2.427 3.262 2.191 2.666 3243 14.801 2.653 3.386 4.322 7.040 4.661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.960 93.051 13.743 26.462 50.950 188.884 19.461 40.874 85.850 378.721 27.393 62.669 143.371 750.378 38.338 95.396 237.376 1,469.772 2.208