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Requirement 3: Average amount invested, Average annual operating income, Initial investment, Present value of net cash inflows

Reference Present Value of $1 Periods 10% 1% 4 1971 943 15 4 ? 5 1% 0 1 71 Q342 Q1 0924 1 06 2 4 14% 769 2 6% Q34 0 40 Q747 ] 13 0926 42 Q94 . , 1 660 26 751 $21 Q12 15% .766 8 0.497 1% 2 742 Q641 582 2.476 1 x47 71 600 Q516 .437 20% 94 8 4 2.42 Li 22 592 |3 4 410 4 42 32 Q14 0905 Q. Q13 60 QQ 1 744 086 746 .11 0877 Q645 Q514 6 66 0.592 0568 5 1.544 Q830 Q.5 1.540 0.500 468 .5 Q.547 502 0.4 .422 Q1.564 513 1.487 1.424 468 1.404 0.61 0322 .466 400 1 0.27 .4 Q3 .24 247 Q314 .266 .225 0.1 0.27 0.2 .14 01 0.2 0.227 1 11 12 % 1 04 , .74 ,722 1 1 1 $42 660 56 $25 Q1 Q.530 Q.577 .41 .827 2.497 2.4 0.442 2.417 1.46 .444 .416 2.429 Q340 Q15 @S 2 .25 13 02 28 2 Q2 257 229 2 1 Q237 20 Q1 1 0.140 215 1 1 .141 Q13 1 @ 18 Q.146 2.125 Q.1 Q1 17 :116 4 Q.15 0.112 14 16 Q362 16 17 1 19 44 .72 0.714 Q8 Q7 23 606 58 Q5 84 84 813 2.44 .46 .466 0.458 .48 418 Q94 1 2% 1 277 Q12 270 250 .232 2.215 .252 21 .212 Q.14 178 21 1 1 14 2.148 2.1 .148 1 118 14 2.18 1 096 @@ 2.1 Q0 1 QQQ @$1 . Q.QQ Q069 QQ 071 @$1 Q043 .64 045 . 1 028 Q0 Q1.5 .82 1 22 24 11 03 @% 80 Q4 4 22 2.4 .422 4 368 Q342 Q10 24 27 2.262 247 Q242 228 Q211 .17 1 Q.14 .1 .1 14 .10 .1 .18 Q1 Q128 Q112 Q.1 @64 66 .049 .043 .044 @@ 0.02 048 040 05 Q021 Q026 Q022 .022 QQ15 2013 .74 8 Q.42 Reference ! 013 Q11 Q1 087 76 645 .744 086 Q514 66 558 Q5 Q544 50 547 502 04 429 1513 467 .424 0540 .50 .4 0.42 .404 0322 400 0.2 03 24 247 0354 06 .26 .227 14 266 25 .1 279 14 @.1 14 06 20 1 11 12 .48 4 1 Q748 .72 , 1 81 642 660 25 1 Q.577 566 56 567 0.56 .41 .827 .497 .4 .442 .417 0475 .444 2.415 366 299 26 60 13 Q2 .2 2 257 20 .206 Q1 .27 . Q1 .1 .147 215 2.1 2.1 Q141 2.18 1 2.1 Q.146 .15 2.1 2.1 Q.137 118 099 QQ4 1 112 Q0 QQ Q5 14 16 Q340 15 1 18 17 1 13 44 20 .7 14 ,700 22 6 570 64 524 13 .44 .45 .4 45 2.48 .416 4 1 312 17 26 Q2.277 2.25 22 270 2.250 .22 216 26 221 Q212 .14 1 2.21 .1 Q1 14 149 1 Q.148 Q.1 2.118 Q104 12 1 .096 @@ QQ 107 1 Q1 Q.QQ 09 QUO 1 Q. 1 .048 4 Q045 Q1 Q026 21 2 11 @@ Q.49 647 5 422 4 4 $22 42 Q610 .47 368 42 1 .2% 294 Q2 2 .247 2.242 28 .211 17 0.14 2.1 14 2.1 2.1 148 164 Q.150 Q.1 .18 @.116 16 4 1 003 Q066 048 Q112 .074 049 0040 102 .8 .048 Q5 092 20 044 024 21 022 028 18 22 5 013 Q016 24 5 00 Q007 27 Q2 Q4 749 742 56 74 0.562 2.464 2.450 .4 .424 0.412 1 Q4 Q321 20g 1 .26 2.248 21 .220 207 1 Q1 174 .1 2.11 150 141 Q11 .1 Q125 .118 2.1 0.099 Q16 .09 0.082 0.075 4 76 0.067 47 Q042 Q.023 .0 29 Q026 22 Q020 .028 Q020 Q15 021 18 Q014 QQ12 2014 1 0.010 Q00g 2006 04 47 Q672 .4 307 20 Q.142 046 . Q022 Q11 006 004 00 1 001 22 0.141 4 4 0021 Q.00 007 0.001 01 1 1 Reference Present Value of Ordinary Annuity of $1 Periods 10% * % 2% 0371 1.30 1.42 113 241 24 2.29 32 3.17 4. 4.71 4.8 4% 6 1. 2.75 2 52 1 2.723 3548 4.29 % 4 1. 28 3.46 4.212 6 1. 24 26 1.7 2.577 12 3997 1. 2.5.1 3.240 1.76 .4 1 3.791 12% 1.6 2.402 3 14% 147 2.22 2314 3.48 15% 1.28 2.2 256 332 16% 62 1.6 2.246 2. 3.274 1 20% 1.56 1.82 2.174 2.1 20 2.5 127 21 5 4.42 4.1 5.7% , 82 56 9471 51 .4 .1 5.417 6.2 20 50 5.242 2 6. .45 .111 5.078 5.7 6.4 7.1 7722 4. 5.52 6.210 2 360 4.77 5. 5.371 $515 24 4.2 5.206 5.747 6.247 6.710 4.4 5. 56 55 $41 4.366 4. 56 5.78 $145 4.111 4.564 4. 5.32 560 4.2 4.6 4.948 5.218 4 4.1 4.4 4.72 53 3 4. 4.344 4.607 4. 3.4 12 4.07 4. 4.44 3.28 36 4.1 4.1 10 4 42 11 12 13 14 16 138 25 11.28] 10.5 14 5 12.14] 114|108 | 9.3 4 104 |12.1111.2105 3 1|124] 11.]11.1110 4 .2% 12 19 536 04 244 69 6. 7.11 .4 5.4% 14 71 5. 14 $424 $11 5.48 5 542 2002 142 5.24 5.421 5.5 5.724 547 5.02 5.17 5.42 5.4 5.575 4.666 4. 4.319 5.00 5.2 4. 4.4 4.5 4.11 4.675 ,745 1 6266 18 17 1 13 14.71 | 13.8] 12.81 | 11.82] 1 1.16 3.447 1 ,313 16.5 | 14.2] 13.112.1 11.274 10.47 9.122 .544 16 | 14.2 | 18.754 | 12.69 | 11.0 1|108 ,66 17.2 | 15.87 | 14.24 | 13.14| 12.0 11.1|108 04 ,360 1047|161114.37711312.4| 11.4]10504 1 129 17]1711 | 15.415 | 14.029 | 121 11.74 | 10 | 1179.22 1917| 15.7] 14.451 | 13.1 12.042 | 11.1 | 10.201 .442 0.4 | 1.2 | 16.444 | 14.7] 13.4| 12.11.22 | 10.31 5 21.24 |114 | 168 | 15.247112 12.11.49]1,529 97 4 022 .21 366 514 $74 7.120 250 .4 $47 62 54 $47 6.1 $1 6.28 6.669 5.749 6 5. 5.929 8.1 5.222 5.2 516 5.36 4. 4.75 4. 12 4.44 4. 21 $49 .72 12 6.38 45 6.74 5 57 11 $44 5.4 5.41 5.4 5.41 4.1 4. 4.925 4. 24 .95 6.44 500 55 56 $41 4. 5 5. $145 4.4 4. 5. 550 42 4. 4.346 5.216 4.1 4.4 4. 53 4. 4.244 4. 3.12 4. 4.30 4.494 3 4.001 41 1 11 12 13 14 16 472 $ 2002 57 552 5.2 20 $4 210 531 5.747 566 .1 .46 10 02 515 247 41 50 111 7722 24 $710 10. 3.25 7.49 1 11.2] 105 | 94 43 5S 12.14] 114|108 | 9.3 304 4 13.04 | 12.1] 11.2| 10.58 9.2% ,745 .244 13] 12.34] 11.11.11| 10 9712 1 568 14.1] 13.57|12.1111 |10|10.1 .447 1 15.58] 14.22] 13.1 12.1| 11.274| 10.477 9.12 16.14.| 13.4 | 12.11.1| 10.059 33 172 |157|14.24 13.14112 | 11.15] 04 148 | 16.81 | 14. | 13.80] 12.4 | 11.4 10.594 6.6 7.14 .4 , 1 6.4% 5 5.45 $14 14 50 100 $424 5842 002 606 11 142 5.234 5.421 5.5 5.724 6.47 502 5.17 5342 5.4$ 5.575 4.6 4. 4.10 5. 592 4. 4.43 4. 4.11 4.75 $265 18 1 1 19 ,13 .544 .78 19 24 .22 201 .514 74 7.12 260 6 4 $487 $850 23 54 5. 5.12 47 5.749 5.222 12 51 5.2 6.1 5 518 $ 59 5 4.7 4.76 4.12 4.44 4. 922 .649 , 21 22 24 % 12 69 17 | 1711 | 15.415 | 14.029 | 12.1 | 11.74 | 10 | 1001 13.0] 178| 16.7] 14.451 | 13.1 | 12.042 | 11.1 | 10.201 20.45] 1.22] 16.444 | 14.7 | 13.4|12| 11.272 | 10371 21.24 |114|16|6247 13. 12.50] 11.48|10.5 22.02 | 1988 | 17.41] 15.22 | 14.94 | 12.|1184 | 10.75 9442 9.5 562 $45 74 74 6.2 5.3 611 044 5.4 5.41 5.422 5.451 5.47 4.1 4. 4.925 4. 4.943 $424 6.484 37 67 28 27 2.7 | 20121 177 | 15. | 14.36 | 13. | 118 | 1010 29 2.5 0.7 | 1|16| 14.84 | 13.211 | 11.|10. | 10.27 24.318 | 21.21 | 1,764 | 16. | 14.| 13.4 | 12.137 | 11.1 | 10.116 25. | 21.44 | 19.1| 16.4 | 16.141 | 13.91 | 12.27 | 11.1 | 10.1 25 | 22 | 19.00 | 17.2 | 15372 | 13.6 | 12.4 | 11.253 | 10.274 | 276 | 23.115 | 19. | 17.18| 15.04 | 13. | 11.25 | 10.757 2.11 3.27 9307 9.370 .427 43 984 22 .066 60 6961 6.41 14 6.54 ] 88 6.11 18 8.1 .1 6.177 5.4 5.4 5.5 5.51 517 4.68 4.84 4.370 4.95 4.99 2002 42 244 71 $642 5.54 4. 50 1|1.424 |5. | 21.4| 13.26 | 16. | 131 | 12.2 | 10.3962 15 ,304 7.1 1 $248 584 4.999 Use the NPV method to determine whether White Products should invest in the following projects: Project A: Costs $265,000 and offers eight annual net cash inflows of $54,000. White Products requires an annual return of 16% on investments of this nature. Project B: Costs $400,000 and offers 10 annual net cash inflows of $77,000. White Products demands an annual return of 14% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) + Read the requirements. 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 Present Annuity PV Factor (i=16%, n=8) Years Inflow Value 1 - 8 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project B. Project B: Years Net Cash Annuity PV Factor Inflow (i=14%, n=10) Present Value 1 - 10 Present value of annuity 0 Investment Net present value of Project B Requirement 2. What is the maximum acceptable price to pay for each project? Maximum Acceptable Price Project A Project B Requirement 3. What is the profitability index of each project? (Round to two decimal places, X.XX.) Select the formula, then enter the amounts to calculate the profitability index of each project. Profitability Index Project A Project B