Labeau Products, Limited, of Perth, Australia, has $12,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Invest in Project Invest in Project Y $ 12,000 $ 12,000 $ 4,000 $ 28,000 6 years 6 years The company's discount rate is 16%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept? EXHIBIT 12B-1 Present Value of $1;1(1+r) Periods 1 2 2 3 4 5 6 7 8 9 0.227 0.208 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 4% 5% 6% 7% 7 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 0.925 0.907 0.890 0.873 0.8570.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.694 0.683 0.672 0.661 0.650 0.640 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 | 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 0.855 0.823 0.792 0.763 | 0.735 0.708 0.683 0.659 0.636 0.636 0.613 0.5920.572 0.552 0.534 0.516 0.499 0.482 0.467 0.467 0.451 0.451 0.437 0.423 0.410 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.328 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.3700.3520.335 0.319 0.303 0.289 0.275 0.262 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.2490.233 0.218 0.204 0.191 0.179 0.168 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 | 0.475 0.429 0.388 0.350 0.3170.287 0.287 0.261 0.237 0.215 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.1370.124 0.124 0.112 0.1020.092 0.083 0.076 0.069 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.229 0.204 0.204 0.182 0.163 0.145 0.130 0.130 0.116 0.104 | 0.093 0.084 0.075 0.068 0.061 0.055 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.074 | 0.065 0.057 0.051 0.0450.040 0.035 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 | 0.047 0.042 0.036 0.0320.028 0.513 0.436 0.371 0.317 | 0.270 0.231 0.198 0.170 0.146 0.146 0.125 0.108 0.093 0.080 | 0.069 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 0.494 0.416 0.350 0.296 0.250 | 0.212 0.1800.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.0200.017 0.014 0.456 0.377 0.3120.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.022 0.019 0.019 0.016 0.014 0.012 0.439 0.359 0.294 0.2420.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 | 0.013 0.0110.009 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.0110.0090.007 0.406 0.3260.262 0.211 0.211 0.170 0.138 0.112 0.091 0.074 | 0.060 0.049 0.040 0.033 0.027 0.022 0.0180.015 0.0120.010 | 0.009 0.007 0.006 0.390 0.310 0.247 0.197 0.158 0.126 | 0.1020.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 | 0.008 0.007 0.006 0.005 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 | 0.059 0.059 | 0.047 0.038 0.030 | 0.024 0.020 | 0.016 0.0160.013 0.013 0.010 0.009 0.007 0.006 0.005 0.004 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 | 0.009 0.007 0.006 0.005 0.004 | 0.003 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 | 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 | 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 | 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0,015 0,012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears: 1/r(1-(1/(1-1) 'n)) Periods 1 2 3 4 5 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% % % 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 1.886 1.859 1.833 1.8081.7831.759 1.736 1.7131.690 1.6681.6471.626 1.605 1.585 | 1.566 1.547 1.528 1.509 1.492 1.474 1.457 1.440 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1.981 1.952 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 | 2.914 | 2.855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 | 2.448 2.404 | 2.362 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.1993.127 3.058 3.058 2.991 2.926 2.864 2.803 2.745 2.689 5.2425.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 3.998 3.9983.889 3.784 3.685 3.589 3.498 3.410 3.326 3.410 3.326 3.245 3.1673.0923.0202.951 6.002 5.786 5.582 5.389 5.206 5.033 4.8684.712 4.564 4.423 4.288 4.160 4.039 | 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 6.733 6.463 6.210 5.971 5.7475.535 5.335 5.146 5.146 4.968 4.799 4.639 4.487 4.344 | 4.207 4.207 4.078 3.954 3.837 | 3.726 3.619 | 3.518 3.421 3.421 3.329 7.4357.108 6.8026.515 6.2475.995 5.759 5.537 5.328 5.1324.946 4.772 4.607 4.451 4.303 4.163 4.031 | 3.905 3.786 3.786 3.673 3.673 3.566 3.463 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.1924.054 3.923 3.799 3.682 3.571 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.3274.177 4.035 3.902 3.7763.656 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.4926.194 5.918 5.918 5.660 5.421 5.197 4.988 4.793 4.793 4.6114.439 4.278 4.1273.985 3.851 3.725 9.986 | 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.1225.842 5.583 5.342 5.1184.910 4.7154.533 4.362 4.3624.203 4.203 4.053 3.912 3.780 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 11.118 10.380 9.712 9.108 8.559 8.061 7.606 7.1916.811 6.462 6.142 5.8475.575 5.324 5.092 4.876 4.876 4.675 4.489 4.315 4.153 4.1534.001 3.859 11.652 10.838 10.106 9.447 8.851 8.315 7.824 7.3796.974 6.604 6.265 5.954 5.668 5.405 5.162 4.9384.730 4.536 4.357 4.189 4.033 3.887 12.166 11.274 10.4779.763 9.1228.544 | 8.022 7.549 7.1206.7296.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.576 4.391 4.219 4.059 3.910 12.659 11.690 10.828 10.059 9.3728.756 8.201 7.702 7.250 6.840 6.467 | 6.128 5.8185.534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928 13.134 12.085 | 11.158 10.336 9.604 8.950 8.365 7.839 7.366 6.938 6.550 6.198 5.8775.584 5.316 5.070 4.843 4.635 4.442 4.263 4.097 3.942 13.590 12.462 | 11.470 10.5949.818 9.129 8.514 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.353 5.101 4.870 4.657 4.460 4.279 4.110 3.954 14.029 12.821 | 11.764 10.836 10.017] 9.292 8.649 8.075 7.562 7.102 6.687 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4.476 4.292 4.121 3.963 14.451 13.163 | 12.042 11.061 10.201 | 9.442 8.772 8.176 7.645 7.170 6.743 6.359 6.0115.696 5.696 5.4105.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 | 12.303 11.272 | 10.371 9.580 8.883 8.266 7.7187.230 6.792 6.399 6.044 5.7235.432 5.167 4.925 4.703 4.499 4.311 4.137 | 3.976 15.247 13.79912.550 | 11.469 10.529 9.707 8.985 8.3487.784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 15.622 14.09412.783 | 11.654 10.675 | 9.823 9.077 8.422 7.8437.330 6.873 6.464 6.09 5.766 5.467 5.195 5.467 5.1954.948 4.721 4.514 4.323 4.147 4.147 3.985 15.983 14.375 13.003 11.826 10.810 9.929 9.161 | | 8.488 1.896 7.372 6.906 6.491 6.118 5.783 5.480 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 16.330 14.643 | 13.211 | 11.987 10.935 | 10.027 | 9.237 8.548 7.943 1409 6.935 6.935 6.514 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.734 4.524 4.332 4.154 3.990 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.9847.441 6.961 6.534 6.1525.810 5.5025.223 4.970 4.739 4.528 4.335 4.157 3.992 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.0227.470 6.983 6.551 6.166 5.820 5.510 5.510 5.229 5.2294.975 4.743 4.531 4.337 4.159 | 3.994 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.0557.496 7.003 6.566 6.1775.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 |