Present value of an annuity of $1
Period	20%
1	0.8333
2	1.5278
3	2.1065
4	2.5887
5	2.9906
6	3.3255
7	3.6046
8	3.8372
9	4.0310
10	4.1925
11	4.3271
12	4.4392
13	4.5327
14	4.6106
15	4.6755
16	4.7296
17	4.7746
18	4.8122
19	4.8435
20	4.8696
25	4.9476
30	4.9789
35	4.9915
40	4.9966
50	4.9995

Present value of $1
Period	20%
1	0.8333
2	0.6944
3	0.5787
4	0.4823
5	0.4019
6	0.3349
7	0.2791
8	0.2326
9	0.1938
10	0.1615
11	0.1346
12	0.1122
13	0.0935
14	0.0779
15	0.0649
16	0.0541
17	0.0451
18	0.0376
19	0.0313
20	0.0261
25	0.0105
30	0.0042
35	0.0017
40	0.0007
50	0.0001

Excel 5 - Alternative Capital Investments The investment committee of Granny's Restaurants Inc. is evaluating two restaurant sites. The sites have different useful lives, but each requires an investment of $1,200,000. The estimated net cash flows from each site are as follows: Year 1 2 3 4 5 6 Net Cash Flows Helena Butte $375,000 $500,000 $375,000 $500,000 $375,000 $500,000 $375,000 $500,000 $375,000 $375,000 The committee has selected a rate of 20% for purposes of net present value analysis. It also estimates that the residual value at the end of each restaurant's useful life is $0, but at the end of the fourth year, Helena's residual value would be $500,000. Instructions: Using formulas/functions wherever available, complete the following on the Input tab... 1) For each site, compute the net present value, using the Present Value of an Annuity table. Ignore the unequal lives of the projects. For each site, compute the net present value, assuming that Helena is adjusted to a four-year life for 2 purposes of analysis. For this use the Present Value of $1 table. Having completed the analysis above, provide a brief recap of what you found in your analysis. Include in 3) the recap, did the results show each project to be positive? Negative? And if Granny's can only do one project, which one should be done and why? Net Present Value Analysis Helena: Annual net cash flow (at the end of each of 6 years) Present value of an annuity of $1 at 20% for 6 years Present value of annual net cash flows Amount to be invested Net present value Butte: Annual net cash flow (at the end of each of 4 years) Present value of an annuity of $1 at 20% for 4 years Present value of annual net cash flows Amount to be invested Net present value Net Present Value Analysis Net Cash Flow Helena Butte Present Value of Net Cash Flow Helena Butte Present Value of $1 at 20% Year 1 Year 2 Year 3 Year 4 Year 4 (resid. value) Total Amount to be invested Net present value