Daryl Kearns saved $270,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $183,000. The following table presents the estimated cash inflows for the two alternatives: Opportunity #1 Opportunity 2 Year 1 $ 55,665 103,500 Year 2 $ 58,890 109,600 Year 3 $78,840 17,300 Year 4 $101,300 14,300 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate: It Is 12 percent. (PV of $1 and PVA of $.1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? b. Compute the payback period for each project. Which should Mr. Kearns adopt based on the payback approach? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? (Round your intermediate calculations and final answer to two decimal places.) Net Present Value Opportunity 1 Opportunity 2 Which opportunity should be chosen? Required Required B > Required A Required Compute the payback period for each opportunity. Which should Mr. Kearns adopt based on the payback approach? Payback Period years Opportunity 1 Opportunity 2 Which opportunity should be chosen? years TABLE 1 PRESENT VALUE OF $1 38 65 75 88 92 10% 10.961535 0 952351 0.943396 0.934579 0925926 0917431 0909091 20924556 0907029 0.899996 0.873439 0.857339 0.341680 0 $264.46 30.53996 0.363535 0.339619 0816295 0.793532 0.772183 0751315 0 SS1804 0322702 0.792094 0762595 0.735030 0.705425 0.653013 50.821927 0.783526 0.747258 0.712956 0.680533 0.649931 0620921 0 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.561474 7 0.759918 0.710651 0.065057 0.622750 0.533490 0 $47034 0.513158 $ 0.730690 0.6768390027412 0.552009 0.540269 0.501966 0.466507 9 0.702597 0.614609 0.591398 0.543934 0.500249 0460428 0.424095 10 0.675564 0.613913 0 558395 0.508349 0.463193 0.422411 0.335543 11 0.61958 0.594679 0.526735 0.475093 0.428883 0.387533 0,350494 12 0.624597 0.556837 0.196969 0.444012 0.397114 0,355535 0.315631 13 0.600574 0.530321 0.468839 0.414964 0 367698 0.326179 0259664 14 0.577473 0 505063 0.442301 0.357817 0 340461 0.299246 0.263331 15 0.555265 0.4810170417265 0.362446 0.315242 0.274535 0.239392 16 0.533905 0.458112 0.393616 0.338735 0.291990 0.251870 0217629 17 0.513373 0.436297 0.37136+ 0.316574 0.270269 0.231073 0.197845 18 0.493625 0.415521 0.350344 0.295361 0.250249 0.211994 0.179859 19 0.474642 0395734 0.330513 0.27650S 0.231712 0.194490 0.163505 20 0.456337 0.376359 0.311805 0.253419 0.214545 0.173431 0.143644 129 149 16% 20 0.892857 0.977193 0.862069 0.833333 0.797194 0.769.468 0.743163 0.691444 0.71 1730 0.674972 0.6406550578704 0.635SIS 0.592050 0.552291 0.452253 0.567427 0.519369 0:47:13 0.401573 0.506631 0.455587 0.4101420334895 0.452349 0 399637 0.3538300279052 0.403383 0.350559 0.303025 0.232565 0 360610 0.307508 0 262953 0.193807 0.321973 0.269744 0.226684 0.161506 0.287476 0.236617 0.195417 0.134585 0.256675 0.207559 0.163463 0 112157 0.229174 0.152069 0.145227 0.093464 0. 204620 0.159710 0.125195 0.077887 0.182696 0.140096 0.107927 0.064905 0.1631220 122592 0.093041 0.054055 0.145644 0.107300 0.0S0207 0045073 0.130010 0.094561 0.069144 0.037561 0.116107 0.052945 0.059607 0.031301 0.103667 0.072762 0.051385 0.026094 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 R 1 2 3 4 3 6 7 3 9 10 11 12 13 14 15 16 17 IS 19 20 45 0.961538 1.S36095 2.775091 3.629995 4.451822 3.242137 6 002055 6.732745 7.435332 S. 110596 3.760177 9.395074 9.985645 10 563123 11 115357 11.652296 12.165669 12 659297 13.133939 13.590326 55 0.952351 1.859410 2.723245 3.545951 4329477 5,075692 3.756373 6.463213 7.107522 7.721735 8.306414 3.563252 9.393573 9.8986-41 10 379658 10.837770 11.274066 11.699587 12.095321 12.462210 68 0.943396 1.833393 2.673012 3.465106 4.212364 4.917324 5.582381 6.209794 6,501692 7.360057 7.556875 S/383544 8.852683 9.294994 9.712249 10.105895 10.477260 10.527603 11.158116 11.469921 75 89 99 0.934579 0.925926 0.917431 1.50301S 1.783265 1.759111 2.624316 2.577097 2 531295 3 387211 3.312127 3.239720 4 100197 3.992710 3.889651 4.766540 4.622330 4.485919 5.389259 5.206370 5.032953 5.971299 5.746639 5.53-4819 6.515232 6.246SSS 5.995247 7023592 6.710031 6.417658 7.495674 7.138964 6.505191 7942656 7.536078 7.160725 8.357651 7.903776 7.486904 3.745465 5.244237 7.756150 9.107914 8.559479 8,06068S 9.446049 S.551369 S.312558 9.763223 9.121635 S.543631 10.059087 9.371887 8.755625 10.335595 9.603599 S.905115 10 59.4014 9.S18147 9.128546 10% 125 0.909091 0.992557 1.735537 1,690051 2456852 2.401831 3.169865 3.037349 3.790737 3.604776 4355261 4.111407 4868419 4.563757 5.334926 4967610 5.759024 31328250 6.144567 5.650223 6.495061 5.937699 6.813692 6.194374 7.103356 6.423548 7366687 6.628168 7.606080 6.810564 7.523709 6.973986 8.021553 7. 119630 3.201412 7.249670 8.364920 7.365777 8.513564 7.469444 149 16% 20% 0.577193 0 862069 0.333333 1.616661 1.605232 1.527778 2.321632 2.245890 2.106481 2.913712 2.798181 2568735 3,433091 3 274294 2.990612 3.598668 3.684736 3.325510 4 298305 4,038565 3.604592 4.635564 4343591 3.837160 4.9.46372 4.606544 4.030967 5.216116 4.833227 4.192472 5:452733 5.023644 4.327060 5.660292 S.197107 4.439217 5.542362 5.342334 4.532681 6.002072 5.467529 4 610567 6.142168 5.575456 4.675473 6.265060 5.668497 4.729561 6.372859 5.745704 4.774634 6.467420 5.817543 4.512195 6.550369 5.577455 4.843496 0.623131 5.929541 4.869580