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Please answer all and I will give thumbs up Project 1 requires an original investment of $39,400. The project will yield cash flows of $10,000

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Project 1 requires an original investment of $39,400. The project will yield cash flows of $10,000 per year for nine years. Project 2 has a calculated net present value of $9,100 over a seven-year life. Project 1 could be sold at the end of seven years for a price of $43,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Year 1 2 3 Present Value of $1 at Compound Interest 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 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0 .5920.424 0.361 0.284 0.194 0 .558 0.386 0.322 0.247 0.162 0.452 9 10 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 2.673 1.736 2.487 3.170 3.465 4.212 4.917 5.582 8 6.210 6 .802 107.360 3.791 4.355 4.868 5.335 5.759 6.145 1.690 1.626 1.528 2.402 2.283 2.106 3.037 2.855 2.589 3.605 3.352 2.991 4.111 3.784 3.326 4.564 4.160 3.605 4.968 4.487 3.837 5.328 4.772 4.031 5.6505.0194.192 9 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. b. Which project provides the greatest net present value? Average Rate of Return-Cost Savings Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $103,000 with a $9,000 residual value and a ten-year life. The equipment will replace one employee who has an average wage of $18,860 per year. In addition, the equipment will have operating and energy costs of $4,980 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent. The following data are accumulated by Paxton Company in evaluating the purchase of $166,200 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $68,000 $40,000 24,000 52,000 Year 2 Year 3 12,000 39,000 Year 4 Year van w N (1,000) 27,000 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.9090.893 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 0.621 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 0.592 0.424 0.361 0.284 0.194 0.558 0.386 0.3220.247 0.162 10 a. Assuming that the desired rate of return is 12%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Present value of net cash flow Amount to be invested Net present value b. Would management be likely to look with favor on the proposal? The net present value indicates that the return on the proposal is than the minimum desired rate of return of 12%

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