Net Present Value A project has estimated annual net cash flows of $80,000 for seven years and is estimated to cost $325,000. Assume a minimum acceptable rate of return of 6%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 20% 1 2 3 4 5 6 7 8 9 0.943 10 1.833 2.673 3.465 4.212 4.917 5.582 6.210 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 12% 6.145 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 15% 0.870 1.626 2.283 2.855 3.353 3.785 4.160 4.487 4.772 0.833 5.019 1.528 2.106 2.589 6.802 7.360 5.650 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places) 2.991 3.326 3.605 3.837 4.031 4.192

A project thas estimated annual net cash fows of $80,000 for seven years and is estimated to cost 5325,000 . Assume a minimum acceptable rate of return of 6\%6. Use the Present Value of an Annuity of $1 at Compound Interest tabfe below