Mcknight Products is trying to decide which of the following projects to invest in: Project A costs $260,000 and offers eight annual net cash inflows of $58,000. Project B costs $375,000 and offers ten annual net cash inflows of $71,000. Compute the IRR of each project and use this information to identify the better investment. (Click the icon to view the present value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) First, compute the IRR of each project. The IRR for Project A is Present Value of Annuity of $1 Periods 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.647 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 3.902 3.808 3.717 3.630 3.546 | 3.465 3.312 3.170 3.037 2.914 4.853 4.713 4.580 4.452 4.329 4.212 3.993 | 3.791 | 3.605 3.433 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 12.134 11.348 10.635 9.986 9.3948.853 7.904 7.103 6.424 5.842 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6.002 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 6.623 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 7.003 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.7798.244 7.105 9.471 12 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.929 6.097 6.177 6.233 3.498 3.812 4.078 4.303 4.494 4.656 4.793 | 4.910 5.008 5.092 5.353 5.467 5.517 5.548 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.870 4.948 4.979 4.997 Periods 4% 20% 1.000 2.200 1% 1.000 2.010 3.030 4.060 5.101 3% 1.000 2.030 3.091 4.184 5.309 1.000 2.040 3.122 4.246 5.416 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 12% 1.000 2.120 3.374 4.779 6.353 18% 1.000 2.180 3.572 5.215 7.154 3.153 3.184 3.640 5.368 7.442 6.152 7.214 8.286 9.369 10.462 6.468 7.662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 Future Value of Annuity of $1 5% 6% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.060 2.080 2.100 3.246 3.310 4.310 4.375 4.506 4.641 5.526 5.637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11.027 11.491 12.488 13.579 12.578 13.181 14.487 15.937 14.207 14.972 16.645 18.531 15.917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21.015 24.215 27.975 21.579 23.276 27.152 31.772 33.066 36.786 45.762 57.275 47.727 54.865 73.106 98.347 66.439 79.058 113.283 164.494 120.800 154.762 | 259.057 442.593 14% 16% 1.000 1.000 2.140 2.160 3.440 3.506 4.921 5.066 6.610 6.877 8.536 8.977 10.730 11.414 13.233 14.240 16.085 17.519 19.337 21.321 23.045 25.733 27.271 30.850 32.089 36.786 37.581 43.672 43.842 51.660 91.025 115.380 181.871 249.214 356.787 530.312 1,342.025 2,360.757 11.567 12.683 13.809 14.947 16.097 12.169 13.412 14.680 15.974 17.293 12.808 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 8.115 10.089 12.300 14.776 17.549 20.655 24.133 28.029 32.393 37.280 72.052 133.334 241.333 767.091 13.486 15.026 16.627 18.292 20.024 9.442 9.930 12.142 12.916 15.327 16.499 19.086 20.799 23.521 25.959 28.755 32.150 34.931 39.581 42.219 48.497 50.818 59.196 60.965 72.035 146.628 186.688 342.603 471.981 790.948 1,181.882 4,163.213 7,343.858 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 29.778 41.646 56.085 95.026 Present Value of $1 Periods| 1% | 2% | 3% | 4% | 5% | 6% | 8% | 10% | 12% | 14% | 16% | 18% | 20% 10.990 | 0.980 | 0.971 | 0.962 | 0.952 | 0.943 | 0.926 | 0.909 | 0.893 | 0.877 | 0.862 | 0.847 | 0.833 0.980 | 0.961 | 0.943 | 0.925 | 0.907 | 0.890 | 0.857 | 0.826 | 0.797 | 0.769 | 0.743 | 0.718 | 0.694 0.971 | 0.942 | 0.915 | 0.889 | 0.864 | 0.840 | 0.794 | 0.751| 0.712 | 0.675 | 0.641 | 0.609 | 0.579 0.96110.924 10.888 | 0.855 | 0.823 10.792 10.735 | 0.683 | 0.636 10.592 | 0.552 | 0.516 10.482 0.951/ 0.906 | 0.863 | 0.822 | 0.784 0.747 | | 0.681 || | 0.621 | 10.567 | | 0.519 | 0.476 | 10.437 0.402 0.942 | 10.888 | 0.837 | 0.790 | 0.746 | 0.705 | 0.630 | 0.564 | 0.507 10.456 | 0.410 | 0.370 | 0.335 10.933 | 0.871 | 0.813 | 0.760 | 0.71 | 0.665 | 0.583 | 0.513 | 0.452 | 0.400 | 0.354 | 0.314 | 0.279 0.923 | 0.853 | 0.789 | 0.731 | 0.677 | 0.627 | 0.540 | 0.467 | 0.404 | 0.351 | 0.305 | 0.266 0.233 0.914 | 0.837 | 0.766 | 0.703 | 0.645 | 0.592 | 0.500 | 0.424 10.361 10.308 10.263 | | 0.225 0.194 0.905 | 0.820 | 0.744 | 0.676 | 0.614 | 0.558 | 0.463 | 0.386 | | 0.322 | 10.270 10.227 | | 0.191 0.162 0.896 | 0.804 | 0.722 | 0.650 | 0.585 | 0.527 | 0.429 | 0.350 | 10.287 | 10.237 | 0.195 | 10.162 0.135 | 0.887 | 0.788 | 0.701 | 0.625 | 0.557] 0.497 | 0.397 | 0.319 | 0.257 | 0.208 | 0.168 | 0.137 10.112 | 0.879 | 0.773 | 0.681 | 0.601 0.530 | 0.469 | 0.368 | 0.290 | 0.229 | 0.182 | 0.145 10.116 | 0.093 | 0.870 | 0.758 | 0.661 | 0.577 | 0.505 | 0.442 | 0.340 | 0.263 | 0.205 | 0.160 | 0.125 | 0.09 | 0.078 0.861 | 0.743 | 0.642 | 0.555 | 0.481 | 0.417 0.239 | | 0.183 | | 0.140 || | 0.108 | | 0.084 0.065 20 | 0.820 | 0.673 | 0.54 | 0.456 | 0.377 | 0.312 | 0.215 | 0.149 | 0.104 | 0.073 | 0.051 | 0.037 | 0.026 25 10.780 | 0.610 | 0.478 | 0.375 | 0.295 | 0.233 | 0.146 | 0.092 | 0.059 | 0.038 | 0.024 | 0.016 | 0.010 30 10.742 | 0.52 | 0.412 | 0.308 | 0.231 10.174 | 0.099 | 0.057 | 0.033 | 0.020 | 0.012 | 0.007 | 0.004 40 0.672 | 0.453 | 0.307 | 0.208 | 0.142 | 0.0971 0.046 | 0.022 | 0.011 | 0.005 | 0.003 | 0.001 | 0.001 23456789mmBB Periods 5% 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 1.050 1.103 1.158 1.216 10% 1.100 1.210 1.331 1.464 1.611 14% 1.140 1.300 1.482 1.689 1.925 12% 1.120 1.254 1.405 1.574 1.762 1.974 2.211 2.476 2.773 3.106 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 1.276 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 Future Value of $1 6% 8% 1.060 1.080 1.124 1.166 1.191 1.260 1.262 1.360 1.338 1.469 1.419 1.587 1.504 1.714 1.594 1.851 1.689 1.999 1.791 2.159 1.898 2.332 2.012 2.518 2.133 2.720 2.937 2.397 3.172 3.207 4.661 4.292 6.848 5.743 10.063 10.286 21.725 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 3.759 4.300 4.435 5.234 5.160 6.192 1.539 1.601 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.665 1.384 1.426 1.469 1.513 1.558 1.806 2.094 2.427 3.262 1.710 1.796 1.886 1.980 2.079 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 6.727 10.835 17.449 45.259 3.479 3.896 4.363 4.887 5.474 5.117 5.936 6.886 7.988 9.266 4.226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188.884 6.176 7.288 8.599 10.147 11.974 2.261 7.430 8.916 10.699 12.839 15.407 1.732 1.801 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 9.646 17.000 29.960 93.051 19.461 40.874 85.850 378.721 27.393 62.669 143.371 750.378 38.338 95.396 237.376 1,469.772
