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Net Present Value Method and Internal Rate of Return Method Wisconsin Healthcare Corp. is proposing to spend $124,200 on a project that has estimated net
Net Present Value Method and Internal Rate of Return Method Wisconsin Healthcare Corp. is proposing to spend $124,200 on a project that has estimated net cash flows of $25,000 for each of the next eight years. a. Compute the net present value, using a rate of return of 15%. Use the table of present values of an annuity of $1 presented above. If required, use the minus sign to indicate a negative net present value. b. Based on the analysis prepared in part (a), is the rate of return (1) more than 15%, (2) 15%, or (3) less than 15% ? c. Determine the internal rate of return by computing a present value factor for an annuity of $1 and using the table of the present value an annuity of $1 presented above. In your calculation, round the net present value factor to three decimal places. %
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