Net Present Value-Unequal Lives Project 1 requires an original investment of $71,500. The project will yield cash flows of $15,000 per year for nine years. Project 2 has a calculated 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 $63,000. 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% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 9 0 .592 0.424 0.361 0.284 0.194 100.558 0.386 0.322 0.247 0.162 0.621 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.361 0.24 0.194 y 100 0.592 .558 1.424 0.386 0.322 0.247 0.162 N 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 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.352 2.991 4.355 4.111 3.784 3.326 8 = 1 0 5 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 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 15%. If required, round to the nearest dollar 10 2 b. Which project provides the greatest net present Project 1 Sunday