Reference: Survey of Accounting 6th edition Book

These are practice study questions

I need help with Required A and Required B

Problem 16-19A (Algo) Using net present value and internal rate of return to evaluate investment opportunities LO 16-2, 16-3 Dwight Donovan, the president of Franklin Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is 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 $112,000 and for Project B are $38,000. The annual expected cash inflows are $31,843 for Project A and $11,606 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Franklin 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 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 Project E Which project should be adopted? References Worksheet Difficulty: 2 Medium Learning Objective: 16-03 Determine and interpret the internal rate of return of an investment opportunity. Problem 16-19A (Algo) Using Learning Objective: 16-02 Determine and net present value and internal interpret the net present value of an rate of return to evaluate investment opportunity. investment opportunities LO 16-2, 16-3Problem 16-19A (Algo) Using net present value and internal rate of return to evaluate investment opportunities LO 16-2, 16-3 Dwight Donovan, the president of Franklin Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is 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 $112,000 and for Project B are $38,000. The annual expected cash inflows are $31,843 for Project A and $11,606 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Franklin 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? References Worksheet Difficulty: 2 Medium Learning Objective: 16-03 Determine and interpret the internal rate of return of an investment opportunity Problem 16-19A (Algo) Using Learning Objective: 16-02 Determine and net present value and internal interpret the net present value of an rate of return to evaluate investment opportunity. investment opportunities LO 16-2, 16-3