Answered step by step
Verified Expert Solution
Question
1 Approved Answer
help please! Net Present Value Method, Internal state of Retum Method, and Analysis The management of Quest Media Inc. is considering two capital investment projects.
help please!
Net Present Value Method, Internal state of Retum Method, and Analysis The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Radio Station TV Station $180,000 $360,000 180,000 360,000 3 180,000 360,000 180,000 360,000 1 2 4 Present Value of an Annuity of $1 at Compound Interest Year 69 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 3 2.673 2.487 2.402 2.283 2.106 V 1.528 4 3.170 2.855 3.465 3.037 2.589 5 3.352 3.791 4.212 3.605 2.991 4.917 6 4.355 3.784 4.111 3.326 3.605 4.564 4.160 7 5.582 4.868 6.210 4.968 3.837 8 5.335 4.487 4.031 4.772 9 6.802 5.759 5.328 5.019 4.192 7150 6.145 5.650 Present Value of an Annuity of $1 at Compound Interest Year 6% 10W 12% 15% 209 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 B 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 The radio station requires an investment of $513,900, while the TV station requires an investment of $1,093,320. No residual value is expected from either project. Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annulty of S1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar Radio Station TV Station front value of annual net cash flows Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present vahou of an annuity of $1 in the table above. If required, use the minus slan to indicate a negative net present value. If required, round to the nearest whole dollar, Radio Station TV Station Present value of annual net cash flows Less amount to be invested Net present value 1b. Compute a present value index for each project. If required, round your answers to two decimal places, Present Value Index Radio Station TV Station 2. Determine the internal rate of return for each project by (a) computing a present value factor for an annulty of S1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent Radio Station TV Station Present value factor for an annuity of $1 Internal rate of return 96 % Previous Check My Work 4 more Check My Work uses remaining Radio Station TV Station Present value of annual net cash flows Less amount to be invested Net present value 1b. Compute a present value index for each project. If required, round your answers to two decimal places. Present Value Index Radio Station TV Station 2. Determine the internal rate of return for each project by () computing a present value factor for an Aifruity of 31 and (b) using the present value of an annuity of S1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent Radio Station TV Station Present value factor for an annuity of $1 Internal rate of return 3. The net present value, present value index, and internal rate of return all indicate that the is a better financial opportunity compared to the although both investments meet the minimum return criterion of 10% Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started