pleaser anser qestion A , B, and C on the FIRST photo. the 2nd photo that includes table 5.3 is the example .

to the firm if it acts At the end of 2019. Uma Corporation is considering a major long-term project in an effort to remain competitive in its industry. The production and sales departments have soon. Specifically, they estimate that a mixed stream of future cash flow savings will occur at the end of the years 2020 through 2025. The years 2026 through 2030 will see its discount rare over the first 6 years will be 7%. The expected discount rate over the The project managers will find the project acceptable if it results in present cash flow savings of at least $860,000. The following cash flow savings data are supplied consecutive $90,0000 cash flow savings at the end of each year. The firm estimates that PREADSHEET EXERCISE determined the potential annual cash flow savings that could accrue years 2026 through 2030 will be 11%. to the finance department for analysis. Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Cash flow savings $110,000 120,000 130,000 150,000 160,000 150,000 90,000 90,000 90,000 90,000 90,000 TO DO Create spreadsheets similar to Table 5.3, and then answer the following questions. 1. Determine the value (at the end of 2019) of the future cash flow savings expected to be generated by this project. b. Based solely on the one criterion set by management, should the firm undertake this specific project? Explain. c. What is the "interest rate risk," and how might it influence the recommendation made in part b? Explain. Present Value simply value equation calculate the present values of all the cash payments using the Table 5.3 shows that one way to find the present value of the annuity is to (Equation 5.2) and sum them. This procedure yields a present value of $3,116.28 Calculators and spreadsheets offer streamlined methods for arriving at this figure. present Long Method for Finding the Present Value TABLE 5.3 of an Ordinary Annuity Year (1) Present value Cash flow Present value calculation 1 $700 $700 $ 673.08 (1 + 0.04)' 2 700 $700 $ 647.19 (1 + 0.04) 700 $700 $ 622.30 (1 + 0.04) 4 700 $700 $ 598.36 (1 + 0.04) 700 $700 $ 575.35 (1 + 0.04) Present value of annuity $3,116.28