Do It! Review 26-3 Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following. Click here to view PV table. Solar Wind Present value of annual cash flows $53,080 $129,800 Initial investment $40,000 $105,800 Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to O decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Solar Wind Net present value Profitability index Which energy source should it choose? The company should choos energy source. solar wind LINK TO TEXT Do It Review 26-4 Wayne Company is considering a long-term investment project called ZIP, ZIP will require an investment of $141,328. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $88,600, and annual cash outflows would increase by $40,200. The company's required rate of return is 12%. Click here to view PV table. Calculate the internal rate of return on this project. (Round answers to 0 decimal places, e.g. 15%.) Internal rate of return on this project is between % and %. Determine whether this project should be accepted? The projed be accepted. should should not LINK TO TL Do It! Review 26-3 Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following. Click here to view PV table. Solar Wind Present value of annual cash flows $53,080 $129,800 Initial investment $40,000 $105,800 Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to O decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Solar Wind Net present value Profitability index Which energy source should it choose? The company should choos energy source. wind LINK TO TEXT
