Please anwser ALL questions - both of the tables are the same for questions 1-4.

Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first investment opportunity will have a four-year useful life will cost $11.986.96, and will generate expected cash inflows of $3.700 per year. The second investment is expected to have a useful life of five years, will cost $12,97719, and will generate expected cash Indlows of $3,600 per year. Assume that V&K has the funds available to accept only one of the opportunities PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the internal rate of return of each investment opportunity. (Do not round Intermediate calculations.) b. Based on the internal rates of return, which opportunity should V&K select Intemal Rate of Retum a First investment Second investment D. V&K should select the First investment TABLE 1 PRESENT VALUE OF $1 45 59 69 78 SS 9 10% 125 149 16% 209 . 0.961535 0.952351 0.943396 0.934579 0.925926 0.917431 0.909091 0.892357 0.577193 0 562069 0.833333 2 0924556 0907029 0.899996 0.873439 0.857339 0.541650 0.826-146 0.797194 0.769468 0.743163 0.694444 3 0.589996 0.563535 0.839619 0.816298 0.793832 0.772153 075131507117800674972 0.610658 0.578704 4 0.854504 08227020.792094 0.762895 0.735030 0.708425 0.683013 0.6355130 592080 0.552291 0.482253 5 0.521927 0.733526 0.747253 0.712956 0.650553 0.619931 0.620921 0.567427 0.519369 0.476113 0 401875 6 0.790315 0.746215 0.704961 0.666342 0.630170 0 596267 0.561474 0.506631 0.455597 0.410142 0.334595 7 0.759919 0.710651 0.665057 0.622750 0.533490 0.547034 0.513158 0.452349 0.399637 0 353530 0.279082 $ 0.730090 0.676539 0.627412 0.582009 0.540269 0 S01566 0.466507 0.403883 0.350359 0.305025 0.232568 9 0.702587 0644609 0 391393 0.543934 0.500249 0.460425 0424095 0.360010 0.307503 0.262953 0.193807 100.675564 0.613913 0.555393 0.505349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0.161506 110.61951 0.554679 0.526753 0.475093 0,425553 0.357533 0.350194 0287476 0 236612 0.195417 0.134555 12 0.624597 0.556837 0.496960 0.444012 0.397114 0355533 0.315631 0.256675 0 207559 0.165463 0.112157 13 0.600574 0 530321 0.463639 0414964 0.367693 0.326179 0 259664 0.229174 0.132069 0.145227 0.093464 14 0.5774750505068 0.442301 0.387817 0.340161 0.299246 0.263331 0.204620 0.159710 0.125195 0.077887 15 0.555265 0.481017 0.417265 03624.16 0.315242 0.274538 0.239392 0.182096 0140096 0.107927 0.061905 16 0.533906 0.453112 0.393616 0.335735 0.291590 0.251870 0.217029 0.16,3122 0.122592 0.093011 0 0540SS 12 0.513373 0:436297 0.371361 0.316574 0.270269 0231073 0.197945 0.145644 0 107800 0 050207 0.015073 13 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179359 0.1.300:10 0.09.1561 0.009144 0.037561 19 0.474642 0.393734 0.330513 0.276505 0.231712 0 191190 0.163505 0110107 0.032945 0.059007 0.031301 20 0.456357 0.376559 0311803 0253419 0.214540 0 170431 0.145614 0.10.3667 0.072762 0051353 0.020034 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 69 0013396 2 3 + 5 6 7 S 1.833393 2073012 3.465106 4.212364 4.917324 5.582381 6 209794 6.301692 7360037 7.536875 8.333914 9 49 0.961538 1.586095 2775091 3.629995 4 451822 5.242137 6.002055 6.732745 7.435332 8.110396 8.760477 9.355074 9.9856-45 10.563123 11.115357 11.652296 12.165609 12.659297 13.133939 13 590326 10 11 12 13 14 15 16 17 18 19 20 0.952381 1.359410 2.723245 3.545951 4329477 5.075692 5.786373 6.463213 7.107522 7.721735 3306414 3.863252 9.393573 9.995641 10.379658 10.837770 11 274006 11639557 12065321 12.462210 79 89 9 10% 129 149 16% 209 0.934579 0.925926 0917431 0909091 0.592557 0.877193 0.862009 0.833333 1308013 1.733265 1.759111 1.735537 1690051 1.646661 1.605232 1527778 2.624316 25770972531295 2.456552 2.401331 2.321632 2.245590 2.106451 3387211 3.312127 3239720 3.169565 3.037349 2.913712 2.798151 2.585735 4.100197 3.992710 3.859651 3.790787 3.604776 3.433081 3.274294 2990612 4.766540 4.622330 4.455919 4355261 4.111407 3.501665 3.684736 3 325510 5.3892595 206370 5 032953 4.568419 4563757 4255305 4035565 3.604592 5971299 5746639 5.534319 5.334926 4.967640 4.638564 +343591 3.837160 6.515232 6,246SSS 5.995247 5.759024 $325250 4946372 4.606544 4.030967 7023582 6.710051 6417655 6.144567 5.650223 5 216116 4533227 4.192472 7.193674 7.138964 6.305191 6.495001 3.937699 5.452733 5.025644 4.327000 7.942656 7.536078 7.160725 6.313692 6.194374 5.660292 5.197107 4.439217 3.357651 7903776 7:456904 7.103356 6.423548 5.342362 5.342334 4.532651 3.745468 81244237 7756150 7 366687 6628168 6 002072 5.467529 1610567 9.107914 3559479 3.060658 7.600000 6. SI0861 6.142165 5.575456 4.675473 9446619 8.851369 3.312553 7523709 6.973956 6.265060 5.663497 4.729561 9.763223 9.121635 S.543631 3.021353 7119630 6.372859 5 748704 4.774634 10.059037 9.371887 3.755625 3.201412 7.219670 0467420 5.517840 4.912195 10.335593 9.603599 3.905115 8.364920 7365777 6 550369 5.377455 4 S43.100 10.594014 98181.47 9.125516 31313564 7.469444 6623131 3.923041 4.569530 8.852683 9.294994 9.712249 10.105895 10.477260 10.327603 11.158116 11.109921 the depots in the two cities. Zachary Delivery recently acquired approximately $6.2 million of cash capital from its owners, and its president, George Hay, is trying to identify the most profitable way to invest these funds. Todd Payne, the company's operations manager, believes that the money should be used to expand the fleet of city vans at a cost of $720,000. He argues that more vans would enable the company to expand its services into new markets, thereby increasing the revenue base. More specifically, he expects cash inflows to increase by $340,000 per year The additional vans are expected to have an average useful life of four years and a combined salvage value of $93,000. Operating the vans will require additional working capital of $36,000, which will be recovered at the end of the fourth year. In contrast, Oscar Vance, the company's chief accountant, believes that the funds should be used to purchase large trucks to deliver the packages between the depots in the two cities. The conversion process would produce continuing improvement in operating savings and reduce cash outflows as follows. Year 1 $152,000 $310,000 Year $397,000 Year 4 $446,000 The large trucks are expected to cost $800,000 and to have a four-year useful life and a $70.000 salvage value in addition to the purchase price of the trucks, up-front training costs are expected to amount to $13,000. Zachary Delivery's management has established a 8 percent desired rate of return. (PV of S1 and PVA of S1 (Use appropriate factor(s) from the tables provided.) Required a.&b. Determine the net present value and present value index for each investment alternative. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answer in whole dollars and not in millions.) Purchase of City Vans Purchase of Trucks a. Not Present Value (NPV) b. Present Value Index (PV) TABLE 1 PRESENT VALUE OF $1 21 4% 5% 6% 7% 85 98 10% 125 145 169 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.562069 0.833333 2 0.924556 0.907029 0.359996 0.873439 0.857339 0.541650 0.526446 0.797194 0.769468 0.743163 0.694444 3 0.585996 0.563838 0.839619 0.816295 0.793832 0.772133 0.751315 0.711750 0.674972 0.640655 0.578704 4 0.354504 0.822702 0.792094 0.762895 0.735030 0.708425 0.683013 0.63551S 0.592050 0.552291 0.452253 5 0 521927 0.783526 0.747253 0.712956 0.650553 0.6.19931 0.620921 0.567427 0.519369 0.476113 0.401875 6 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.455537 0.410442 0.334595 7 0.759915 0.710631 0.665057 0.622750 0.533490 0.547034 0.513158 0.452349 0.399637 0.353830 0.279052 S 0.730690 0.676339 0.627412 0.582009 0.540269 0.501366 0.460507 0.403883 0.350359 0.305025 0.232568 9 0.702.537 0.614609 0.591598 0543934 0.500249 0.460425 0.424093 0 360610 0.307505 0.262953 0.193807 10 0.075564 0.6139130.558395 0.503349 0.463193 0.422411 0.385543 0.321973 0 209744 0.226694 0.161 506 11 0.619551 0.584679 0.52675S 0.475093 0.429583 0.357533 0.350194 0.287476 0.236617 0.195417 0.134588 12 0.624597 0.556337 0.496969 0.444012 0.397114 0.355535 0.315631 0.256675 0.207559 0.168463 0.112157 13 0.600574 0.530321 0.468839 0414964 0.367698 0.326179 0.259664 0.229174 0.132069 0.145227 0.093464 14 0.577475 0 505065 0.442301 0.357817 0.340161 0.299246 0,263331 0.201620 0.159710 0.125195 0.077857 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.152696 0.140096 0.107927 0.06.1903 16 0.533903 0.458112 0.393646 0.335735 0.291990 0.2518700 217629 0.163122 0.122892 0.093041 0.054053 17 0.513373 0.436297 0371364 0.316574 0.270269 0231073 0197545 0.145614 0.1079000050207 0045073 18 0.493625 0.415521 0.350344 0.295564 0.250249 0:211994 0.179339 0130040 0.094561 0.009144 0.007561 19 0.174642 0.395734 0.330513 0.27650S 0.231712 0194490 0.163508 0.116107 0.002948 0.059007 0.031301 20 0.456357 0.376359 0.311805 0.253419 0214548 0.175431 0.1436-14 0.103667 0.072762 0.051385 0 026084 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 1 2 3 + 5 6 7 S 9 10 11 12 13 49 0.961535 1.536095 2775091 3.629395 4451522 5242137 6.002055 6.732745 7.435332 5. 110596 5.760477 9 385074 9.955648 10.563123 11.118357 11.652296 12.165669 12.059297 13.133939 13 590326 5% 0.952381 1.559410 2.723245 3.545951 4.329477 5.075692 5.756373 6.463213 7.107522 7.721735 S.306414 3.563252 9 393573 9 593641 10.379655 10 837770 11.274066 11659587 12.055321 12.462210 6 0.943396 1.833393 2.673012 3.465106 4212364 4.917324 5.582381 6 209794 6.801692 7.360087 7.536373 5.333944 S.S52653 9.294934 9.712249 10.105895 10.477260 10.827603 11.158116 11.469921 79 Se 99 10% 125 149 169 20% 0934579 0.925926 0.917431 0909091 0.892557 0.877193 O S62069 0.833333 1.SOSOIS 1.783265 1.759111 1.735537 1690051 1 646661 1.605232 1.527775 2.024316 2577097 2.531295 2.486352 2401331 2.321632 2.245890 2.106481 3.387211 3.312127 3.239720 3.169365 3.037349 2913712 2.79SISI 2.558735 4100197 3.992710 3.859651 3.790787 3.604776 3.433081 3.274294 2990612 4.766540 4.622380 455919 4 355261 4.111407 3.385668 3.694736 3.325510 3:389259 5:206370 5.032953 4868419 4.563757 4.289305 4.038565 3.604592 5971299 5.746639 5.534519 5334926 4967640 4.635864 4.343591 3.837160 6 515232 6.246888 5.995247 5.759024 5328250 4946372 4.606544 4.030967 17.023552 6.710051 6.41765S 6.1-44567 5650223 5 216116 4833227 4.192472 7.495674 7.135964 6,305191 6.495061 5.937699 5.452733 5.025644 4.327060 7.942636 75360737.160725 6.313692 6.194374 5.660292 5.197107 4.439217 357651 7903776 7.486904 7. 103356 6.423545 5.542362 5.342334 4.532681 3.745165 8 244237 7.756150 7 360687 6,628168 6.002072 5.467529 1610567 9.107914 5.359479 3.0006SS 7.006050 6.810564 6.142165 5.575456 4.675473 9.446649 3.851369 8.312555 7.823709 6973956 6.265060 5.668497 4.729561 9.763223 9.121633 3543631 S021553 7. 119630 6.372859 5.748704 4.774634 10.059057 9.371837 9.755625 S.201412 7.249670 6.467420 5.817845 4812195 10.335595 9.603599 8.905115 8.361920 7.365777 6.550369 5.577455 4.343496 10.594014 9.318147 9.125546 8:513564 7.469444 6.623131 5928341 4569580 15 16 17 18 19 20 Dwight Donovan, the president of Thornton Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project Als to purchase a machine that will enable factory automation, the machine is expected to have a useful life of five years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $103.000 and for Project Bare $34,000. The annual expected cash inflows are $25,121 for Project A and $8,969 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Thornton Enterprises desired rate of return is 6 percent. Pof $1 and PVA of $.1) (Use appropriate factor(s) from the tables provided.) Required 6. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the Internal rate of return approach? Complete this question by entering your answers in the tabs below. Required a Required B Compute the net present value of each project, which project should be adopted based on the net present value approach? (Round your final answers to 2 decimal places.) Net Present Value Project A Projed B Which project should be adopted? Pour will be able to invest in only one of them. Project A is to purchase a machine that will enable tactory automation, the machine is expected to have a useful life of five years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $103,000 and for Project B are $34,000. The annual expected cash inflows are $25,121 for Project A and $8.969 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Thornton Enterprises desired rate of return is 6 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of return approach? Complete this question by entering your answers in the tabs below. Required A Required B Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of return approach Internal Rate of Return Project A Project B Which project should be adopted? % % b. Compute the payback period for each project. Which should Mr. Kearns adopt based on the payba Complete this question by entering your answers in the tabs below. Required A -51 Required B Compute the payback period for each opportunity. Which should Mr. Kearns adopt based on the payback Payback Period years Opportunity 1 Opportunity 2 Which opportunity should be chosen? years