Dwight Donovan, the president of Fanning Enterprises, is considering two investment opportunities. Because of will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; expected to have a useful life of four years and no salvage value. Project B supports a training program that will employees operating the current equipment. Initial cash expenditures for Project A are $102,000 and for Project annual expected cash inflows are $30,796 for Project A and $12,303 for Project B. Both investments are expecte benefits for the next four years. Fanning Enterprises' desired rate of return is 4 percent. (PV of $1 and PVA of $1) 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 valu b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the in 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 approac (Round your final answers to 2 decimal places.) Net Present Value Project A Project B Which project should be adopted? 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 ife of four 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 $102,000 and for Project B are $39,000. The annual expected cash inflows are $30,796 for Project A and $12,303 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Fanning Enterprises' desired rate of return is 4 percent. (PV of $1 and PVA of 5.1) (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? cu r a. Compute the net present value of each project. Which project should be adopted based on the net present value approac b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate approach? Complete this question by entering your answers in the tabs below. Required A Required B Compute the approximate Internal rate of return of each project. Which one should be adopted based on the internal rate of return approach? Internal Rate of Return Project A Project B Which project should be adopted? % %
