Dwight Donovan, the president of Fanning Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of five years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $113,000 and for Project B are $33,000. The annual expected cash inflows are $37,785 for Project A and $9,155 for Project B. Both Investments are expected to provide cash flow benefits for the next five years. Fanning Enterprises' desired rate of return is 6 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 project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of return approach? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of each project. Which project should be adopted based on the net present value approach? (Round your final answers to 2 decimal places.) Net Present Value Project A Project B Which project should be adopted? Project A < Required A Required B > TABLE 1 PRESENT VALUE OF $1 3 4 n 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 20% 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 0.924556 0.907029 0.889996 0.873439 0.857339 0.841680 0.826446 0.797194 0.769468 0.743163 0.694444 0.888996 0.863838 0.839619 0.816298 0.793832 0.772183 0.751315 0.711780 0.674972 0.640658 0.578704 0.854804 0.822702 0.792094 0.762895 0.735030 0.708425 0.683013 0.635518 0.592080 0.552291 0.482253 5 0.821927 0.783526 0.747258 0.712986 0.680583 0.649931 0.620921 0.567427 0.519369 0.476113 0.401878 6 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.455587 0.410442 0.334898 7 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 0.513158 0.452349 0.399637 0.353830 0.279082 8 0.730690 0.676839 0.627412 0.582009 0.540269 0.501866 0.466507 0.403883 0.350559 0.305025 0.232568 9 0.702587 0.644609 0.591898 0.543934 0.500249 0.460428 0.424098 0.360610 0.307508 0.262953 0.193807 0.675564 0.613913 0.558395 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0.161506 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 0.350494 0.287476 0.236617 0.195417 0.134588 12 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.318631 0.256675 0.207559 0.168463 0.112157 13 0.600574 0.530321 0.468839 0.414964 0.367698 0.326179 0.289664 0.229174 0.182069 0.145227 0.093464 14 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 0.263331 0.204620 0.159710 0.125195 0.077887 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.182696 0.140096 0.107927 0.064905 16 0.533908 0.458112 0.393646 0.338735 0.291890 0.251870 0.217629 0.163122 0.122892 0.093041 0.054088 17 0.513373 0.436297 0.371364 0.316574 0.270269 0.231073 0.197845 0.145644 0.107800 0.080207 0.045073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179859 0.130040 0.094561 0.069144 0.037561 19 0.474642 0.395734 0.330513 0.276508 0.231712 0.194490 0.163508 0.116107 0.082948 0.059607 0.031301 20 0.456387 0.376889 0.311805 0.258419 0.214548 0.178431 0.148644 0.103667 0.072762 0.051385 0.026084 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 n 16 17 12345678901234567890 4% 0.961538 5% 0.952381 6% 0.943396 1.886095 1.859410 1.833393 7% 0.934579 1.808018 2.775091 2.723248 2.673012 2.624316 3.629895 3.545951 3.465106 3.387211 4.451822 4.329477 4.212364 4.100197 5.242137 5.075692 4.917324 4.766540 6.002055 5.786373 5.582381 5.389289 8% 9% 0.925926 0.917431 1.783265 1.759111 2.577097 2.531295 3.312127 3.992710 4.622880 5.206370 6.732745 6.463213 6.209794 5.971299 5.746639 10% 0.909091 1.735537 2.486852 3.239720 3.169865 3.889651 3.790787 4.485919 4.355261 5.032953 4.868419 5.534819 5.334926 12% 14% 0.892857 0.877193 1.690051 1.646661 2.401831 16% 20% 0.862069 0.833333 1.605232 1.527778 2.321632 3.037349 3.604776 2.245890 2.106481 2.913712 2.798181 2.588735 3.433081 3.274294 2.990612 4.111407 3.888668 3.684736 3.325510 4.563757 4.288305 4.038565 3.604592 4.967640 4.638864 4.343591 3.837160 7.435332 7.107822 6.801692 6.515232 6.246888 5.995247 5.759024 5.328250 4.946372 4.606544 4.030967 8.110896 7.721735 7.360087 7.023582 8.760477 8.306414 7.886875 7.498674 9.385074 8.863252 8.383844 7.942686 9.985648 9.393573 8.852683 8.357651 14 10.563123 9.898641 9.294984 8.745468 15 11.118387 10.379658 9.712249 9.107914 11.652296 10.837770 10.105895 9.446649 12.165669 11.274066 10.477260 9.763223 9.121638 12.659297 11.689587 13.133939 13.590326 10.827603 12.085321 11.158116 10.335595 12.462210 11.469921 10.594014 10.059087 9.371887 6.710081 7.138964 7.536078 7.160725 6.813692 7.903776 7.486904 7.103356 8.244237 7.786150 7.366687 8.559479 8.060688 7.606080 8.851369 8.312558 7.823709 8.543631 8.755625 9.603599 8.905115 8.364920 9.818147 6.417658 6.144567 5.650223 5.216116 4.833227 4.192472 6.805191 6.495061 5.937699 5.452733 5.028644 4.327060 6.194374 5.660292 5.197107 4.439217 6.423548 5.842362 5.342334 4.532681 6.628168 6.002072 5.467529 4.610567 6.810864 6.142168 5.575456 4.675473 6.973986 6.265060 5.668497 4.729561 8.021553 8.201412 7.119630 6.372859 5.748704 4.774634 7.249670 7.365777 6.467420 6.550369 5.817848 4.812195 5.877455 4.843496 9.128546 8.513564 7.469444 6.623131 5.928841 4.869580