Net present value method, internal rate of return method, and analysis for a service company Required:

required, round to the nearest whole dollar.

$1$b$.$ Compute a present value index for each project. If required, round your answers to two decimal places.

Present Value Index

present value factor answers to three decimal places and internal rate of return to the nearest whole percent.

Wind Turbines

Biofuel Equipment

Present value factor for an annuity of $$1$

Internal rate of return

$\%$

$\%$

The net present value, present value index, and internal rate of return all indicate that the.

is$/$are a better financial opportunity compared to the

$,$ although both

investments meet the minimum return criterion of $10\%.$

The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows:

The wind turbines require an investment of $$999,250,$ while the biofuel equipment requires an investment of $$1,913,310.$ No residual value is expected from either project.