The investment committee of Shield Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $1,208,000. The estimated net cash flows from each project are as ollows: Net Cash Flow Year Server Upgrade $401,000 401,000 401,000 401,000 Office Expansion $304,000 304,000 304,000 304,000 304,000 304,000 The committee has selected a ate of 10% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is g0, but at the end of the fourth year, the orice expansion s residual value ould be $380,000. Present Valuof $1 at Compound Interest Year 12% 0.943 .909 0.993 0.870 0.833 0.890 0.826 0.797 0.750.694 0.940 .7S 0.712 .59 0 579 0.792 0.683 0.636 0.572 0.482 0.7470.62 567 0.497 0-402 0.705 0.564 0.507 0,432 0.335 0.665 0.513 52 0.376 0 279 0.627 0.4670.404 0.327 0.233 0.592 0.424 0.361 .284 0.194 0.558 0.386 0.322 .247 0.162 15% Present Value of an Annuity of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.99 0.893 0.870 .833 1.833 736 1.600 1.626 1.528 2.673 24872.402 2.283 2.106 3.46S 3.170 3.037 2.8SS 2.589 4.212 3.791 3.605 3.352 2.991 4.9174.355 4111 3.784 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4968 4.487 3.837 6.802 5.759 5328 4.772 4.031 10 7.3606.1455650 5.019 4192 Year