Buckeye Healthcare Corp. is proposing to spend $124,872 on a six-year project that has estimated net cash flows of $33,000 for each of the six years.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a. Compute the net present value, using a rate of return of 20%. Use the table of present value of an annuity of $1 presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value. Present value of annual net cash flows 180,800 x Less amount to be invested 196,640 x Net present value -15,840 x b. Based on the analysis prepared in part (a), is the rate of return (1) more than 20%, (2) 20%, or (3) less than 20%? Less than 20% c. Determine the internal rate of return by computing a present value factor for an annuity of $1 and using the table of the present value of an annuity of $1 presented above. 10 X % Feedback Check My Work a. Multiply the annual net cash flows by the present value of an annuity factor for 6 periods at 12%, Exhibit 5. Subtract the amount to be invested. b. What does a negative net present value indicate? c. Divide the amount to be invested by the annual net cash flow. In Exhibit 5, find the rate closest to this factor for