Net Present ValueUnequal Lives

Project 1 requires an original investment of $50,900. The project will yield cash flows of $14,000 per year for 9 years. Project 2 has a computed net present value of $15,900 over a seven-year life. Project 1 could be sold at the end of seven years for a price of $53,000.

Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below.

Present Value of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	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
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a. Determine the net present value of Project 1 over a seven-year life with residual value, assuming a minimum rate of return of 20%. If required, round to the nearest dollar.

Net Fresent Value-Unectual uves Project 1 requires en original investment of $50,900. The project will yield cash flows of $14,000 per year for 9 years. Project 2 has a computed nel present value of $15,900 ver a seven-peer life Project 1 could be sold at the end of seven years for a price of $53,000 Use the Present Value of $1 at Compound Interest and the Present Value of an Annulty of $1 at Compound Interest tables shown belon. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.833 0.909 0.826 0.893 0.797 0.079 0.756 2 0.890 0.594 3 0.143 0.75: 0.712 0.65 0.570 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.552 0.497 0.402 G 0.705 0.564 0.507 0.432 0.325 7 7 0.605 0.513 0.152 0.75 U.279 8 0.627 0.467 0.404 0.322 0.233 . 0.592 0.424 0.361 0.284 0.194 10 0.558 0.306 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10%. 12% 15% 20% 1 0.943 0.909 0.692 0.070 0.933 2 1.833 1.736 1.090 1.625 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3,465 3.170 3.037 2.855 2.580 5 4.2.2 3.79 3.605 3.353 2.99 6 4.9.7 4.355 4.211 3.785 3.326 7 7 5.562 4.868 4.554 4.160 3.505 6.210 5.335 4.950 14187 3.037 9 6.802 5.759 4.03: 5.328 5.650 4.772 5.0:9 10 7.363 6.145 4.192 a. Determine the nat present value of Project 1 over a seven-year ife with residual value, assuming a minimum rate of return of 20%. If required, round to the nearest dollar