Cornell Company is considering a project with an initial investment of $596,500 that is expected to produce cash inflows of $125,000 for nine years. Cornell's required rate of return is 12%. (Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) 14. What is the NPV of the project? 15. What is the IRR of the project? 16. Is this an acceptable project for Cornell? ... 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net Cash Annuity PV Factor Present Years Inflow (i=12%, n=9) Value 1-9 Present value of annuity 0 Investment Net present value 15. What is the IRR of the project? Start by calculating the Annuity PV factor. (Enter the factor amount to three decimal places, X.XXX.) Annuity PV factor The IRR of the project is 1-9 Present value of annuity 0 Investment Net present value 15. What is the IRR of the project? Start by calculating the Annuity PV factor. (Enter the factor amount to three decimal places, X.XXX.) Annuity PV factor The IRR of the project is 16. Is this an acceptable project for Cornell? This van acceptable project for Cornell, because the NPV is than zero and the IRR is V than Cornell's required rate of return. (Click on the icon to view Present Value of $1 table.) Reference Reference Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12 Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.8 Period 20.9800.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.7 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.7 Period 4 10.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.6 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.5 Period 60.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.5 ...-..-.-.-.-. Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 1: Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0. Period 2 1.9701.942 1.9131.886 1.859 1.8331.8081.783 1.759 1.7361. Period 32.9412.884 2.8292.775 2.723 2.673 2.624 2.577 2.531 2.487 2. Period 4 3.902 3.808 3.7173.630 3.5463.465 3.3873.3123.240 3.170 3. Period 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.9933.890 3.791 3. Period 65.795 5.601 5.417 5.2425.0764.917 4.767 4.623 4.4864.355 4 Period 76.728 6.472 6.230 6.0025.786 5.582 5.389 5.206 5.033 4.868 4. Period 8/7 65217 325 17 020 6 733 16 46316210159715 747 15 535 15 335 4! Print Done Print Done
