EBOOK Problem 22-11 Investments Quick and slow cost $800 each, are mutually exdusive, and have the following cash flows. The firm's cost of capital is 6 percent Cash Intlows 0 S Year $1.000 $275 2 275 3 275 4 275 a. According to the net present value method of capital budgeting, which investment(s) should the firm make use Appendix Band Appendix D to answer the question. Use a minus sign to enter negative values, any. Round your answers to the nearest cent. NPV (Investment Quick): $ NPV (Investment Slow): $ The firm should make investment(s) Salact b. According to the internal rate of return method of capital budgeting, which investments) should the firm make? Use Appendix D to answer the question Round your answers to the nearest whole number IRR (Investment Quick): TRR (Investment Slow): The firm should make Investments) Select CIF Q is chosen, the $1,000 can be reinvested and earn 8 percent. Does this information alter your condusions concerning investing in Q and S? To answer assume that s's cash flows can be reinvested at its internal rate of retum. Use the rounded internal rate of return from part b. Use Appendix A and Appendix to answer the question. Round your answers to the nearest cent. Terminal value (Investment Quick): $ Terminal value (Investment Slow): $ The firm should make Investment(s) Select Would your answer be different Iss cash flows were reinvested at the cost of capital (6 percent)? Use Appendix Cto answer the question. Round your answer to the nearest cent. Terminal value (Investment Slow): 5 The firm should make Investment(s) Select Interest Factors for the Future Value of One Dollar Time Period year) 1 2 3 4 5 1% 2% 3% 5% 6% 7% 1.010 1.020 1030 1040 1050 1060 1.070 1.020 1040 1.061 1.082 1.102 1.124 1.145 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.041 1.082 1.126 1.170 1216 1.262 1.311 1.051 1.104 1.159 1.217 1.276 1338 1.403 8% 1.080 1.166 1.260 1.360 1.469 9% 1.090 1.188 1.295 1.412 1.539 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 1.140 1.300 1.482 1.689 1.925 15% 1.150 1.322 1.521 1.749 2.011 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1939 2.288 20% 1.200 1.440 1.728 2.074 2.488 6 7 8 9 10 1.062 1.126 1.194 1.265 1.340 1.419 1501 1.072 1.149 1.230 1.316 1407 1.504 1606 1.083 1.172 1.267 1.369 1477 1.594 1718 1.094 1.195 1.305 1.423 1.551 1.689 1.838 1.105 1.219 1.344 1.480 1.629 1.791 1967 1.587 1.677 1.772 1.714 1.828 1.949 1.851 1.993 2.144 1.999 2.172 2.358 2.159 2.367 2.594 1.974 2211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.313 2.660 3.059 3.518 4.046 2.436 2.826 3.278 3.803 4.411 2.700 2.986 3.186 3.583 3.759 4.300 4436 5.160 5.234 6.192 11 12 13 14 15 1.116 1.243 1.384 1.539 1710 1.898 2.105 1.127 1.268 1.426 1.601 1.796 2.012 2.252 1.138 1.294 1.469 1.665 1.886 2.133 2.410 1.149 1319 1.513 1732 1980 2.261 2.579 1.161 1.346 1.558 1.801 2.079 2397 2.759 2.332 2.518 2.720 2.937 3:172 2.580 2.813 3.066 3.342 3.642 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 4.652 5.350 6.153 7,076 8.137 5.117 5.936 6.886 7.988 9.266 6.176 7.287 8.599 10.147 11.973 7.430 8.916 10.699 12.839 15.407 16 17 18 19 20 1.173 1.373 1.605 1873 2.183 2.540 2952 1.184 1.400 1.653 1.948 2.292 2.693 3.159 1.196 1.428 1.702 2.026 2.407 2.854 3.380 1 208 1.457 1754 2.107 2.527 3.026 3.617 1.220 1.486 1.806 2191 2.653 3.207 3.820 3.426 3970 3.700 4.328 3.996 4.717 4 316 5.142 4.661 5.604 4.595 5.054 5.560 6.116 6.728 6.130 8.137 9.358 10.748 6.866 9.276 10.761 12.468 7690 10.575 12.375 14.463 8.613 12.056 14.232 16.777 9.646 13.743 16.367 19.461 14.129 16.672 19.673 23.214 27 393 18.488 22.186 26.623 31.948 38.337 25 1282 1.641 2094 2.666 3.386 4.292 5.427 6.848 8.623 10.835 17.000 26.462 32.91940.874 62.688 95 396 30 1.348 1.811 2.427 3.243 4322 5.743 7.612 10.063 13.268 17449 29.960 50.950 66,212 85.850 143.370 237.370 Interest Factors for the Future Value of an Annuity of One Dollar Time Period (eg year) 1 NM 1% 1.000 2010 3030 4,060 5.101 1000 2020 3060 4.122 5204 1.000 2.030 3.091 4.184 5309 4% 1.000 2.0-40 3.122 4.246 5.416 5% 1.000 2.050 3.152 4310 5.526 7% 1000 2010 3.215 4460 5.751 1.000 2060 3.184 4.375 5.637 8% 1000 2080 3.246 4.506 5.867 9% 1.000 2090 3.278 4.573 5.985 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.770 6.353 14% 1.000 2.140 3.440 4921 6.610 16% 1.000 2. 160 3.506 5067 6877 20% 1.000 2200 3.640 5368 7442 4 5 6 7 8 9 10 6.152 7.214 8.286 9.369 10.462 6.308 7434 8.583 9.755 10.950 6.468 7662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 6.802 8.142 9549 11.027 12578 6.975 8.394 9.897 11.491 13.181 7.153 8654 10,260 11978 13 816 7.336 8.923 10.637 12.488 14.487 7.523 9.200 11.028 13.021 15.193 7716 9.487 11.436 13.579 15.937 8.115 10,089 12.300 14.776 17.549 8.536 10.730 13 233 16.085 19.337 8.978 9.930 11.413 12915 14 240 16.499 17.518 20.798 21.32125958 11 12 13 14 15 11.567 12 683 13.809 14 947 16.097 12.169 13.412 14.680 15 974 17.293 12.808 13.486 14.192 15.026 15.618 16.627 12.086 18.292 18.599 20.024 14.207 15.917 17.713 19 599 21.579 14.972 16,870 18.882 21.051 23.276 15.784 17 888 20.161 22.550 25.129 16.645 18.977 21495 24 215 27152 17.560 20.141 22.953 26.019 29.361 18.531 21.384 24.523 27975 31.772 20.655 24.138 28.029 32 393 37.280 23.044 27.271 32089 37.581 43.842 25.732 30.850 36.786 43.672 51.659 32.150 39 580 48.496 59.195 72035 16 17 18 19 20 17.258 18.430 19.615 20.811 22.019 18.639 20.012 21 412 22861 24 297 20.157 21.762 23.414 25 117 26.870 21.825 23.698 25 645 27.671 29.778 23.657 25.673 25.840 28213 28 132 30 906 30.539 33.760 33.066 36 786 27.888 30.840 33.999 37.379 40 995 30.324 33.750 37.450 41.446 45.72 33.003 36.974 41.301 46.018 51.160 35.950 40.545 45.599 51.159 57.275 42.753 50.980 48 884 59 118 55.750 68 934 63.440 769 72.052 91025 60.925 87.442 71.673 105.93 84140 128.11 98.603 154.74 115.370 186.68 25 28243 32.020 36.459 41.646 47727 54865 63.249 72.106 84.701 98.347 13333 181.87 249.210 471.98 30 34.785 40.568 47.575 56.085 66 439 79.058 94 461 113.283 136 308 164 494 241 333 356.878 530.31011818 Interest Factors for the Present Value of One Dollar Time Period (e.g year? 1% 7% 1 184 131 lo Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g. year) 19 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 1 0.990 0.980 0,971 0.962 0.952 0.943 0.935 0.926 0917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 2 1.970 1942 1.913 1886 1859 1833 1.808 1783 1759 1.736 1690 1647 1.605 1.566 1.528 1.4571 392 1.332 1.276 3 2.941 2884 2.829 2.775 2.723 2.673 2624 2577 2531 2.487 2402 2 372 2.246 2.174 2.106 1981 1868 1766 1674 3.902 3.808 3717 3630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1966 5 4.853 4.713 4.580 4.452 4.329 4212 4.100 3.993 3.890 3.791 3605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4355 4 111 3.889 3.685 3.498 3.326 3.020 2.759 2534 2.399 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4868 4564 4.288 4,039 3.812 3.605 3.242 2.937 2.678 2455 8 7.652 7325 7020 6.733 6.463 6.210 5.971 5.7475.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5985 5.759 5328 4.946 4.607 4,303 4,031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7722 7.360 7024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7179 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2978 2.683 12 11.255 10.575 9.954 9.385 8.853 8.384 7943 7.536 7.1616.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9986 9.394 8.534 8.35B 7904 7487 7.103 6.424 5.842 5.342 4.910 4.533 3912 3.427 3.040 2.727 14 13.004 12.106 11.296 10 563 9.899 9.295 8.745 8.244 7786 7.367 6.628 6.002 5.468 5008 4611 3.962 3.459 3.061 2.740 15 13.865 12 849 11.938 11.118 10.380 9712 9.108 8.559 8060 7606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 17 18 19 20 14.718 13.578 12.561 11652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4,003 3.503 3.088 2.758 15.562 14.292 13.166 12 166 11.274 10.477 9.763 9.122 8544 8.002 Z.120 6.373 5.749 5222 4.775 4.059 3.518 3.097 2.763 16.390 14 992 13.754 12.659 11.690 10 828 10.0599372 8.756 8.2017.250 6.467 5.818 5.273 4.812 4.000 3.529 3.104 2767 17.226 15678 14.324 13.134 12.085 11.158 10 336 9.604 8.950 8.365 7366 6.550 5.877 5.316 4.844 4,097 3,539 3.109 2.770 18.046 16.351 14.877 12 590 12 462 11.470 10.594 9.818 9.128. 8514 7.469 6.623 5.929 5353 4870 4.110 3546 3.113 2.772 25 22.023 19 523 17.413 15 622 14.094 12783 11.654 10.675 9823 9.077 7843 6.873 6.097 5467 4.948 4147 3.564 3.122 2.776 30 25.80822.937 19.600 17.292 15:373 13.765 12.409 11.258 10.274 9.427 8.055 7003 6.177 5.517 4.9794.160 3.569 3.124.2.778