Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $234,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows Year 1 Year 2 Year 3 Project Project C1 C2 $ 14,000 $ 98,000 110,000 98,000 170,000 98,000 $ 294,000 294,000 Totals a. The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question. Complete this question by entering your answers in the tabs below. Required Required A B The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Project C1 Net Cash Flows Present x Value of 1 at 10% Present Value of Net Cash Flows Year 1 Year 2 Year 3 = Totals Project C2 Net Cash Flows Present x Value of 1 at 10% Present Value of Net Cash Flows = Year 1 Year 2 Year 3 Totals Which projects, if any, should be accepted Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $234,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows Year 1 Year 2 Year 3 Project Project C1 C2 $ 14,000 $ 98,000 110,000 98,000 170,000 98,000 $ $ 294,000 294,000 Totals a. The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question. Complete this question by entering your answers in the tabs below. Required Required A B Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question. Show less (i) is the internal rate of return higher or lower than 10% for Project C1? (ii) is the internal rate of return higher or lower than 10% for Project C2?
