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Turner Video will invest $94,500 in a project. The firm's cost of capital is 10 percent. The investment will provide the following inflows. Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 WN Inflow $ 33,000 35,000 32,000 38,000 45,000 The internal rate of return is 15 percent. a. If the reinvestment assumption of the net present value method is used, what will be the total value of the inflows after five years? (Assume the inflows come at the end of each year. (Do not round intermediate calculations and round your answer to 2 decimal places.) Total value of inflows b. If the reinvestment assumption of the internal rate of return method is used, what will be the total value of the inflows after five years? (Use the given internal rate of return. Do not round Intermediate calculations and round your answer to 2 decimal places.) Total value of inflows Appendix A Future value of $1,FV, FV = P1+1 1* 3% 4% 8% Period 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1010 1.020 1.030 1.041 1.051 1.062 1.072 1.083 1094 1.105 1.116 1.127 1.138 1.149 1.161 1.173 1.184 1.190 1 208 1 220 1 282 1.348 1.489 1.545 2x 1.020 1.040 1061 1,082 1. 104 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 9.346 1.373 1.400 1.428 1.452 1486 1.041 1.811 2.208 2692 1.030 1.051 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1 344 1.384 1.426 1469 1513 1.558 1.605 1653 1.702 1.754 1806 2094 2,427 3.202 4384 1.040 1.082 1.125 1.170 1217 1265 1.316 1,369 1423 1.480 1.639 1.601 1655 1732 1801 1873 1.948 2026 2107 2191 2.606 3.243 4,803 7.107 5% 1.050 1.103 1.158 1.216 1.276 1.340 1407 1477 1.551 1.629 1710 1796 1.886 I 1.980 2.079 2.183 2.292 2.407 2.527 2.653 3.380 4322 7040 11,467 Percent 6% 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 1 898 2012 2133 2 261 2.397 2540 2.693 2.854 3.020 3.207 4292 5743 10.286 18420 7% 1.070 1.145 1.225 1.311 1.403 1.501 1.606 1.718 1.838 1.967 2.105 2.252 2.410 2579 2.759 2.952 3.159 3.380 3,617 3.870 5.427 7.612 14.974 29,457 1.080 1.166 1.260 1.360 1.469 1,587 1.714 1.851 1.999 2.159 2332 2518 2.720 2937 3.172 3.426 3700 3.996 4.316 4.661 6.848 10.063 21725 46.902 9% 1.090 1.188 1.295 1.412 1.539 1.677 1.828 1.993 2.172 2.367 2580 2.813 3.066 3.342 3,642 3970 4.328 4.717 5.142 5.504 8.623 13.268 31.409 74358 10% 1.100 1.210 1.331 1.464 1.611 1.772 1949 2.144 2.358 2.594 2853 3.138 3.452 3.797 4,177 4,595 5.054 5.560 6.116 6.727 10.835 17.449 45.259 117.39 1.110 1.232 1.368 1.518 1.685 1.870 2.076 2.305 2.558 2.839 3.152 3.498 3.883 4310 4.785 5,311 5.895 6.544 7.263 8.062 13.585 22.892 65.001 184.57 8 $%888 18 19 20 25 30 40 50 Appendix A (concluded) Future value of $1 Period 14% 30% 1 2 3 4 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 5 6 7 8 9 10 11 12 13 6.192 12 1.120 1.254 1.405 1.574 1.762 1.974 2211 2.476 2.773 3.106 3.479 3.896 4.363 4,887 5.474 6.130 6.866 7.690 8.613 9.646 17.000 29.960 93.051 289.00 13% 1.130 1.277 1.443 1.630 1842 2082 2353 2658 3.004 3.395 3.836 4335 4.898 5.535 5.254 7.067 7.986 9024 10.197 11.523 21 231 39.116 132.78 450.74 1.140 1.300 1.482 1,689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 8.13 9 276 10.575 12056 13.743 26.462 50.950 188 88 700 23 15% 1.150 1323 1.521 1.749 2011 2313 2.660 3.059 3.518 4046 4652 5.350 6.152 7076 8.137 9358 10.761 12375 14232 16367 32919 06212 26786 1,083.7 163 1.160 1.346 1.561 1.811 2.100 2436 2826 3278 3.803 4.411 5.117 5.936 6.886 7988 9.256 10.748 12468 14.463 16.777 19.461 40874 85.850 378.72 1.6707 17% 1.170 1.369 1.602 1.874 2,192 2,565 3.001 3.510 4.10B 4.807 5.624 6.580 7.699 9.007 10.539 12.330 14,426 16.879 19.748 23.106 50.658 111.07 533.87 2.5662 Percent 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 7.288 8,599 10.147 11.974 14,129 16.672 19.673 23214 27.393 62.669 14337 750.38 3.927.4 19% 1.190 1.416 1.685 2.005 2.386 2.840 3.379 4.021 4.785 5.696 6.777 8.064 9.596 11.420 13.590 16.172 19.244 22.091 27.252 32.429 77.388 184.68 1.051.7 5.988.9 25% 1.250 1.563 1.953 2.441 3.052 3.815 4.768 5.960 7.451 9.31a 11.642 14,552 18.190 22.737 28.422 35.527 44.409 55.511 69.389 86,736 254.70 807.79 7,523.2 70 ML 1.300 1.690 2.197 2.856 3.713 4.827 6.276 8.157 10.604 13.786 17.922 23.298 30.288 39,374 51.186 66.542 96.504 112.46 146.19 190.05 705.64 2.620.0 36.1 19.0 Oronan 7.430 8.916 10.699 12.839 15.407 18.488 22.186 25.623 31.948 38.338 95.396 237:38 1,469.8 1004 14 15 16 17 18 19 20 25 30 40 50
