Net Present Value Method, Internal Rate of Return Method, and Analysis for a Service Company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Biofuel Equipment Year Wind Turbines $280,000 300,000 280,000 300,000 300,000 280,000 300,000 280,000 The wind turbines require an investment of $887,600, while the biofuel equipment requires an investment of $911,100. No residual value is expected from either project Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 9 6.802 .759 5328 4.772 4.031 10 7.360 6.145 5.650 5019 4.192 Previous Next 0 more Check My Work uses remaining Check Hy Work ave and Et Submit Assignment for Grading 10 7.360 6.145 5.650 5.019 4.192 Required: 1a. compute the net present value for each project. use a rate of 6% and the present value of an annuity or $1 in the table at ove ir reg red round to the nearest dollar Wind Turbines Bio Fuel Equipment Present value of annual net cash flows Less amount to be Invested Net present value 1b. Compute a present value index for each project. If required, round your answers to two decimal places Present Value Index Wind Turbines Bio Fuel Equipment 2. Determine the internal rate of retum for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest percent Wind Turbines Bio Fuel 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 alll indicate that the V is/are a better financial opportunity compared to the , anhough both investments meet the minimum return creen on cre%. Previous Next Check My Work 10 more Check My Wok uses emaining