needs help in 4questions

Present values& future value

In managerial accounting, the capital budgeting method that recognizes the time value of money by discounting cash flows over the life of the project, using the company's required rate of return as the discount rate, is called the:

payback method.

financing method.

simple rate of return method.

net present value method.

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The following information is given about a proposed investment project:

Discount rate	9%
Life of the project	9 years
Initial investment	$440,000
Annual cash inflows	84,000
Salvage value	0

The net present value of the proposed investment project is closest to:

$63,580.

$84,000.

?$63,580.

$503,580.

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A company's ______________________ is usually regarded as its minimum required rate of return.

project ranking index

working capital

payback rate

cost of capital

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Austin Company has $40,000 available to invest in either Project D or Project E. The company's required rate of return (discount rate) is 10%. The following data are available on these projects:

	Project D	Project E
Investment required	$ 40,000	$ 40,000
Annual cash inflows	$ 10,000	0
Single cash inflow at the end of 5 years	0	$ 65,000
Life of the project	5 years	5 years

What is the net present value of Project E? (Select the answer that is closest to your calculations.)

$ (365)

$ 15,000

$ 365

$ 0

E X HI B I T i 18-2 Present Value of an Annuity of $1 in Arrears: 1- Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 1 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 0.06 0.800 2 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.628 1.605 1.585 1.566 1.547 1.528 1.509 1.492 1.474 1.457 1440 2.775 2.723 2.873 2.624 2.577 2.531 2.487 2.444 2402 2.361 2.322 2.283 2246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1.981 1.952 4 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3037 2.974 2.914 2855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2.448 2404 2.362 5 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3352 3.274 3.199 3.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 6 5.242 5.076 4.917 4.767 4.623 4.406 4.355 4.231 4111 3.990 3.889 3.784 3.685 3.509 3.498 3.410 3.326 3.245 3167 3.092 3.020 2.051 76.002 5.786 5.582 5.389 5.206 5.033 4.860 4.712 4.564 4,423 4.208 4.160 4.039 3.922 3.812 3.706 3.605 3.500 3416 3.327 3.242 3.161 8 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837 3.726 3619 3.518 3.421 3.329 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 10 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.899 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3.682 3.571 11 8.760 8.306 7.887 7,499 7.139 6805 6,495 6.207 5.938 5.607 5,453 5.234 5.029 4.83 4.656 4.486 4.327 4.177 4035 3.902 3.776 3.656 12 9.385 B.B63 8.384 7.943 7.536 7.161 6,814 6.492 6.194 6.918 5,660 5.421 5.197 4.98 4.793 4.611 4,439 4.278 4.127 3.985 3851 3.725 13 9.986 9.394 8,853 B.358 7.904 7.487 7.103 6.750 6424 6.122 5,842 5.583 5.342 5.118 4.910 4,715 4.533 4.362 4.203 4.053 3.912 3.780 14 10.563 9.899 9.295 8.745 8.244 7786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611 4.432 4265 4.108 3.962 3.824 15 11.118 10.380 9.712 9.108 8.559 8.061 7606 7.191 6.811 6462 6.142 5.847 5.575 5.324 5.092 4,876 4.675 4489 4.315 4.153 4.001 3.859 16 11,662 10.83B 10.106 9447 B.851 8.313 7.824 7.379 6974 6.604 6.265 5.954 6.868 5405 5.162 4.93B 4.730 4,538 4357 4.189 4.033 3.887 17 12.166 11.274 10,477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6.047 6.749 5475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 3.910 18 12.659 11.690 10.828 10.059 9.372 8.758 8201 7.702 7.250 6840 6,467128 58a 5.534 5.273 Sbaa 482 4soa 441 4243 4 080 ages 19 13.134 12,085 11.158 10.336 9.604 8.950 B.365 7,839 7.368 6.938 6,650 .198 5877 5.584 5.316 5.07D 4.843 4.635 4.442 4.283 4.097 3.942 20 1 025 6,623 .259 5.829 5.620 5.353 5.101 4.870 4.657 4460 4.279 4.110 3.954 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7469 7 14.029 12.B21 11.764 10.838 10.017 9.292 B.849 8.075 7.562 7.102 6.687 8312 5.973 5.85 5.384 5.127 4891 4.675 4476 4.292 4.121 3.983 22 14.451 13.163 12.042 11.081 10.201 9.442 B.772 8.178 7.845 7.170 6,743 8.359 6.011 5.898 5,410 5,149 4909 4.690 4488 4.302 4.130 3970 23 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8.268 7.718 7.230 6.792 6.399 6.044 5.723 5.432 5.167 4925 4.703 4499 4.311 4.137 39 24 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 7.784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4937 4.713 4507 4.318 4.143 3981 25 15.822 14.094 12.783 11.854 10.675 9.823 9.077 8422 7.843 7.330 6.873 8484 6.097 5.788 5.467 5.195 4.948 4.721 4514 4.323 4.147 3.985 15.983 14.375 13.003 11.828 10.810 9929 9.161 8488 28 1 27 18.330 14.843 13211 11.987 10.935 10.027 9.237 8.54B 7.943 7409 6.935 6.514 6.138 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.154 789B 7.372 6.906 8.491 6.118 5.783 5.480 5.208 4.958 4728 4.520 4.32B 4.151 3.988 28 18.883 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 29 18.984 15.141 13.591 12.278 11.158 10.198 9.370 8.850 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4531 4.337 4.159 3.994 30 17.292 15.372 13.766 12.409 11.258 10.274 9.427 8.694 8.055 7496 7.003 6.588 6.177 5.829 5.517 5.235 4.979 4.748 4.534 4.339 4.160 3.995 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7634 7.105 6.642 6.233 5.871 5.549 5.258 4.997 4.760 4.544 4.347 4.166 3.999