Citco Company is considering investing up to $525,000 in a sustainability-enhancing project. Its managers have narrowed their choices to three potential projects. Project A would redesign the production process to recycle raw materials waste back into the production cycle, saving on direct materials costs and reducing the amount of waste sent to the landfill. . Project B would remodel an office building, utilizing solar panels and natural materials to create a more energy-efficient and healthy work environment Project C would build a new training center in an underserved community, providing jobs and economic security for the local community Required: 1. Assuming the cost of capital is 11%, complete the table below by computing the payback period, NPV, Profitability Index, and Internal Rate of Return. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your "NPV" answers to the nearest whole dollar amounts. Round your "PI" and "IRR" answers to 2 decimal places.) Project B Project C (Remodel office building) (New training facility Project A (Redesign production process) (525.000) 105,000 8 years 85.000 (584000) 73.000 Required investment Annual cost savings Project life Salvage value Payback period NPV @ 11% (340,000) 85,000 10 years 65.000 6 years 40,000 years Profitability Index @ 11% Internal rate of return Required: 1. Assuming the cost of capital is 11%, complete the table below by computing the payback period, NPV, Profitability Index, and Int Rate of Return. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amounts should be indicated by a minus Round your "NPV" answers to the nearest whole dollar amounts. Round your "PI" and "IRR" answers to 2 decimal places.) Project B Project C Project A (Redesign production process) (525.000) 105,000 (Remodel office building) (New training facility) (584000) 73.000 (340,000) 85,000 6 years 40,000 10 years 85 000 65,000 Required investment Annual cost savings Project life Salvage value Payback period NPV @ 11% Profitability index @ 11% Internal rate of return 2. Based strictly on the economic analysis, in which project should they invest? Project A Project B Project
