Question 7 (5 points) Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return? average rate of return O accounting rate of return O cash payback period O internal rate of return Question 10 (5 points) Saved A project has estimated annual cash flows of $90,000 for three years and is estimated to cost $250,000. Assume a minimum acceptable rate of return of 10%. Using the following tables, determine the (a) net present value of the project and (b) the present value index, rounded to two decimal places. Below is a table for the present value of $1 at compound interest Year 6% 10% 12% 0.943 0.909 0.893 5 2 0.890 0.826 0.797 3 0.840 0.751 0.712 8 4 0.792 0.683 0.636 S 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 at 10% Tor 3 years present value of annual cash flows 223830 Less: Investments -250000 Divide: Investment 250000