Chapter 11 HW

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X Data table Option #1: $15,000,000 after five years Option #2: $2,250,000 per year for five years Option #3: $14,000,000 after three yearsCongratulations! You have won a state lottery. The state lottery offers you the following (after-tax) payout options: a (Click the icon to view the payout options.) The present value of the payout is: (Round your answers to the nearest whole dollar.) Present value of the payout, Option #1: :l Requirements . What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. . What is the maximum acceptable price to pay for each project? . What is the protability index of each project? Round to two decimal places. Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A: Costs $290,000 and offers eight annual net cash inows of $57,000. Vargas Products requires an annual return of 12% on investments of this nature. ' Project B: Costs $385,000 and offers 10 annual net cash inows of $74,000. Vargas Products demands an annual return of 10% on investments of this nature. Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Net Cash Annuity PV Factor Present Years Inow (i=12%, n=8) Value 1 - 8 Present value of annuity 0 Investment Net present value of Project A X More info . Project A: Costs $295,000 and offers eight annual net cash inflows of $54,000. Stenback Products requires an annual return of 12% on investments of this nature. . Project B: Costs $385,000 and offers 9 annual net cash inflows of $72,000. Stenback Products demands an annual return of 10% on investments of this nature.Consider the following projects being considered by Stenback Products: The IRR for each project is: project A; E Project B