Please Include Calculations; thank you.
Use the NPV method to determine whether White Products should invest in the following projects: Project A: Costs $270,000 and offers seven annual net cash inflows of $53,000. White Products requires an annual return of 14% on investments of this nature. Project B: Costs $390,000 and offers 9 annual net cash inflows of $76,000. White Products demands an annual return of 12% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Net Cash Present Annuity PV Factor (i=14%, n=7) Years Inflow Value 1 - 7 Present value of annuity 0 Investment Net present value of Project A Requirements 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. 2. What is the maximum acceptable price to pay for each project? 3. What is the profitability index of each project? Round to two decimal places. ck Answer javascript:doExercise (3); - X Reference Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.951 0.906 0.863 0.822 0.784 0.747 0.713 8% 9% 10% 12% 14% 0.926 0.917 0.909 0.893 0.877 0.857 0.842 0.826 0.797 0.769 0.794 0.772 0.751 0.712 0.675 0.735 0.708 0.683 0.636 0.592 0.681 0.650 0.621 0.567 0.519 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.666 0.630 0.596 0.564 0.507 0.456 0.623 0.583 0.547 0.513 0.452 0.400 0.582 0.540 0.502 0.467 0.404 0.351 0.544 0.500 0.460 0.424 0.361 0.308 0.508 0.463 0.422 0.386 0.322 0.270 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 Period 16 0.853 0.7280.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.1800.130 0.095 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.073 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.242 0.1990.1640.135 0.093 0.064 Period 22 0.803 0.647 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 Period 23 10.795 0.634 0.507 10.406 0.326 0.2621 0.211 0.170 10.138 | 0.112 1 0.074 | 0.049 Reference 2.941 Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.6901.647 Period 3 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.4864.355 4.111 3.889 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 Period 9 8.566 8.162 7.786 7.435 | 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.6505.216 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 | 7.1616.814 6.194 5.660 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.8246.9746.265 Period 17 15.562 14.292 | 13.166 12.166 11.27410.477 9.763 9.122 8.544 8.022 7.1206.373 Period 18 16.398 14.992 | 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.2017.250 6.467 Period 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.5147.469 6.623 Period 21 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.6497.562 6.687 Period 22 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.2019.442 8.7727.645 6.743 Period 23 20.456 18.292 | 16.444 | 14.857 | 13.489112.303l 11.272 | 10.3711 9.580 | 8.883 | 7.718 16.792
