REQUIREMENT:
WHAT IS THE NPV OF EACH PROJECT? WHAT IS THE MAXIMUM ACCEPTABLE PRICE TO PAY FOR EACH PROJECT?
1) CALCULATE THE NPV OF EACH PROJECT (ROUND ANSWERS TO NEAREST WHOLE DOLLAR)
THE NPV OF PROJECT A IS $ ??
THE NPV OF PROJECT B IS $ ??
2) NOW CALCULATE THE MAXIMUM ACCEPTABLE PRICE TO PAY FOR EACH PROJECT (ROUND ANSWERS TO NEAREST WHOLE DOLLAR)
PROJECT A IS $ ??
PROJECT B IS $ ??
PRESENT VALUE OF ANNUITY OF $1
PRESENT VALUE OF $1
FUTURE VALUE OF ANNUITY OF $1
FUTURE VALUE OF $1
Use the NPV method to determine whether Salon Products should invest in the following projects: Project A costs $285,000 and offers eight annual net cash inflows of $63,000. Salon Products requires an annual return of 14% on projects like Project B costs $390,000 and offers nine annual net cash inflows of $74,000. Salon Products demands an annual return of 12% on investments of this nature. 91 65712 79315 0897 339 23317 7 801 34566 8 0-85159 3 201222 33344 44444 4444 9 7 8283 3082 3778 4 679 0 01223 33444 44455 5555 V, 25684 59 497 83 272 60 45 9012 01223 34444 55555 5666 98966 30222 3335 883 394 826 01223 34445 55566 6677 275 I 481 935 221 6 8640 36 91468 4 101233 44455 56666 7788 96701 5 3879 5 595 5437 354 9106 7417 38371 4813 01233 44556 66777 8999 23 3 770 9 862 91 9753 01233 45566 77788 9 727 1 0356 786 352 7202 761 1810 352 8642 95283 838 1235 01234 45667 78899 2936 552 6638 7860 3 4031 0 2457 3 07417 3838 59-987 01234 55677 8899 265 2 22351 56 2 51 56 01 3579 741 739 01234 56678 899 10 70 7 99875 42075 29 01234 56778 99 011 4793 83 12523 7 7268 8 887 0122 69 01234 56788 9 5 6385 203 088 00123 58261 05 92567 98 77654 01234 56789 36 2 1 338 2 0-2345 12345 6789 10 Periods 1% 18% | 20% 1 0.990 0.980 0.971 0.962 0.952 0.9430.926 0.909 0.893 0.8770.862 0.847 0.833 2 0.980 0.961 0.943 0.925 0.9070.8900.8570.826 0.7970.7690.743 0.718 0.694 3 0.971 0.942 0.915 0.889 0.864 0.8400.7940.7510.712 0.675 0.641 0.609 0.579 4 0.961 0.924 0.888 0.855 0.823 0.792 0.7350.683 0.636 0.592 0.5520.516 0.482 5 0.951 0.906 0.863 0.822 0.784 0.7470.6810.621 0.5670.519 0.476 0.437 0.402 6 0.942 0.888 0.837 0.790 0.746 0.7050.6300.5640.5070.456 0.410 0.370 0.335 7 0.933 0.871 0.813 0.760 0.711 0.6650.583 0.513 0.452 0.400 0.354 0.314 0.279 8 0.923 0.853 0.789 0.731 0.6770.6270.5400.467 0.404 0.351 0.305 0.266 0.233 9 0.914 0.837 0.766 0.703 0.645 0.5920.5000.424 0.361 0.308 0.263 0.225 0.194 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 11 0.896 0.804 0.722 0.650 0.585 0.5270.4290.350 | 0.2870.237 0.195 0.162 0.135 12 0.887 0.788 0.701 0.625 0.557 0.4970.397 0.319 0.257 0.208 0.168 0.137 0.112 13 0.879 0.773 0.681 0.601 0.530 0.469 0.3680.2900.229 0.182 0.145 0.116 0.093 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.2630.2050.160 0.125 0.099 0.078 15 0.861 0.743 0.642 0.555 0.481 0.4170.315 0.2390.183 0.140 0.108 0.084 0.065 20 0.820 0.673 0.554 0.456 0.377 0.312 0.2150.1490.104 0.073 0.051 0.037 0.026 25 0.780 0.610 0.478 0.3750.295 0.233 0.1460.092 0.059 0.038 0.024 0.016 0.010 30 0.742 0.552 0.412 0.308 0.231 0.174 0.0990.0570.033 0.020 0.012 0.007 0.004 40 0.672 0.453 0.307 0.208 0.142 0.0970.0460.0220.011 0.005 0.003 0.001 0.001 2 8 40 5% 8 12% | 14% | 16% 6 3 Periods1 5% 1.000 8% 14% 1.000 3 1.000 1.000 1.000 1.000 1.000 1.000 2 4.060 4.122 4.184 4.246 4.3104.375 4506 4.641 2 8.923 9487 10.089 10.730 11.41412.142 12.916 9.897 0.63711.436 12.300 13.233 14.240 15.32716.499 2 9.369 9.755 0.15910.583 11.02711.491 12.488 13.579 14.776 16.085 17.519 19.08620.799 10.46210.950 11.464 12.006 12.57813.181 14.487 15.93717.549 19 337 21.321 23.52125.959 11567 1216912808 13.486 14.207 14.972 16.64518.531 20.655 23.045 25.733 28.75532.150 12.68313.41214.192 5026 15.91716.87018.977 21.384 24.13327.27130.850 34.93139.581 3.80914680 15.618 16.627 17.71318.882 21495 24.52328.029 32.089 36.786 42.21948.497 4.947 5.97417086 18.292 9.599 21.01524.21527.975 32.393 37.58143.672 50.81859.196 16.097 17.29318.599 20.024 21.579 23.27627.152 31.772 37.28043.84251.660 60.965 72.035 22.01924.29726.870 29.77833.06636.786 45.762 57.275 72.052 91.025 115.380 146.628186.688 28.24332.03036.459 41.646 47.727 54.86573.10698.347 133.334 181.871 249.214342.603471.981 4.785 40.56847.57556.08566.43979.058 113.283 164.494 241.333 356.787 530.312 790.9481,181.882 48.8866040275401 95.026 120.800 154.762259.057 442593767.0911,342.025 2,360.757 4,163.213 7,343.858 3 2 2 3 014 400 996 ses 300 160 102 400-EN 33 996 0% 200 7 11 49 11122 23456 78025 8 4 7 1742 1 3 01 72 10 2617 11-12 23345 678 6%-160 996 ssi 011 100 400 800 011 M7 SOB 996 998 200 160 gra 350 rzi 08 32 -11112 22334 55679 19 7 8 2%-120 250 400 STA rez ona 011 76 73 105 000 990 osi 996 360 74 6 457 924 148 0 8% 000 195 250 360 400 997 014 asi 999 199 32 $15 /20 997 112 001 88 ost 125 928 72 18 5791 12 22223 46 10 21 200 6% 000 24 202 ase 400 004 ss ese 750 ese 012 130 201 997 201 202 6 16 501122 02507 693 9152-1 8271 0112 23344 5 630 9 678 1628 0 4 234 04 26 49 72 95 8 6 2345 67891 12345 20 25 30 40
