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two part question, thank you! Net Present Value A project has estimated annual net cash flows of $5,000 for six years and is estimated to
two part question, thank you!
Net Present Value A project has estimated annual net cash flows of $5,000 for six years and is estimated to cost $37.500. Assume a minimum acceptable rate of return of 20%. Use the Present Value of an Annuity of $1 at Compound Interest table below Present Value of an Annuity of $1 at Compound Interest Year 69 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5,019 4.192 Determine (1) the net present value of the project and (2) the present value index. If required, use the minussion to indicate a negative net present value Net present value of the project (round to the nearest dollar) Present value Index (rounded to two decimal places) Internal Rate of Return A project is estimated to cost $124,061 and provide annual net cash flows of $37,000 for five years. Present Value of an Annuity of $1 at Compound Interest Year 690 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3,465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 5 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 3.837 8 6.210 5.335 4,487 4.968 5.328 9 6.802 5.759 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. % Step by Step Solution
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