Use the NPV method to determine whether Hawkins Products should invest in the following projects: Project A: Costs $285,000 and offers seven annual net cash inflows of $55,000. Hawkins Products requires an annual return of 14% on investments of this nature. Project B: Costs $395,000 and offers 10 annual net cash inflows of $77,000. Hawkins Products demands an annual return of 12% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, XXXX. Use parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Net Cash Annuity PV Factor Present Years Inflow (i=14%, n=7) Value 1 - 7 Present value of annuity 0 Investment Net present value of Project A i Requirements 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. 2. What is the maximum acceptable price to pay for each project? 3. What is the profitability index of each project? Round to two decimal places. Present Value of $1 % Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 1% 2% 3% 4% 5% 6% 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.890 0.971 0.942 0.915 0.8890.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.942 0.888 0.837 0.790 0.746 0.705 0.933 0.871 0.813 0.760 0.711 0.665 0.923 0.853 0.789 0.731 0.677 0.627 0.914 0.837 0.766 0.703 0.6450.592 0.905 0.820 0.744 0.676 0.614 0.558 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 10% 12% 14% 0.917 0.909 0.893 0.877 0.8420.826 0.797 0.769 0.772 0.751 0.712 0.675 0.708 0.683 0.636 0.592 0.650 0.621 0.567 0.519 15% 16% 18% 20% 0.870 0.862 0.847 0.833 0.756 0.743 0.7180.694 0.658 0.641 0.609 0.579 0.572 0.552 0.516 0.482 0.497 0.476 0.437 0.402 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.596 0.564 0.507 0.456 0.547 0.513 0.452 0.400 0.502 0.467 0.404 0.351 0.460 0.424 0.361 0.308 0.422 0.386 0.322 0.270 0.432 0.410 0.370 0.376 0.354 0.314 0.327 0.305 0.266 0.284 0.263 0.225 0.247 0.227 0.191 0.335 0.279 0.233 0.194 0.162 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 Period 15 10 861 1 743 10 642 10 555 481 0417 0.475 0.444 0.415 0.388 0.262 0.429 0.397 0.368 0.340 0315 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0275 10 230 183 n 140 10 123 10 108 0094 0065 0.292 0.252 0.218 0.163 0.270 0.231 0.1980.146 0.250 0.212 0.180 0.130 0.232 0.194 0.164 0.116 0.215 0.178 0.149 0.104 0.123 0.107 0.093 0.071 0.054 0.108 0.093 0.080 0.060 0.045 0.095 0.081 0.069 0.051 0.038 0.083 0.070 0.060 0.043 0.031 0.073 0.061 0.051 0.037 0.026 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.242 Period 22 0.803 0.647 0.522 0.422 0.342 0.278 0.226 Period 23 0.795 0.634 0.507 0.406 0.326 0.262 0.211 Period 24 0.788 0.622 0.492 0.390 0.310 0.247 0.197 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.184 Period 26 0.772 0.598 0.464 0.361 0.281 0.220 0.172 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161 Period 28 0.757 0.574 0.437 0.333 0.255 0.196 0.150 Period 29 0.7490.563 0.424 0.321 0.243 0 185 0.141 Period 30 0.742 0.552 0.412 0.308 0.231 0.174 0.131 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 Period 50 0.608 0.372 0.228 0.141 0.087 0.054 0.034 0.199 0.184 0.170 0.158 0.146 0.164 0.135 0.093 0.150 0.123 0.083 0.138 0.112 0.074 0.126 0.1020.066 0.116 0.092 0.059 0.064 0.053 0.044 0.031 0.022 0.056 0.046 0.038 0.026 0.018 0.049 0.040 0.033 0.022 0.015 0.043 0.035 0.028 0.019 0.013 0.038 0.030 0.024 0.016 0.010 0.033 0.026 0.021 0.014 0.009 0.029 0.023 0.018 | 0.011 0.007 0.026 0.0200.0160.010 0.006 0.022 0.017 0.014 0.008 0.005 0.020 0.015 0.012 0.007 0.004 0.135 0.125 0.116 0.107 0.099 0.106 0.084 0.053 0.098 0.076 0.047 0.090 0.069 0.042 0.082 0.063 0.037 0.075 0.057 0.033 0.046 0.032 0.022 0.011 0.005 0.0040.003 0.001 0.001 0.021 0.013 0.009 0.003 0.001 0.001 0.001 1% 2% 0.990 0.980 1.970 1.942 2.941 2.884 3.902 3.808 4.853 4713 3% 0.971 1.913 2.829 3.717 4.580 Present Value of Ordinary Annuity of $1 4% 5% 6% 7% 8% 9% 10% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.775 2.723 2.673 2624 2.577 2531 | 2.487 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.452 4.329 4.212 4.100 3.993 3.890 3.791 5.242 5.076 4.917 4.767 4.623 4.4864.355 6.002 5.786 5.582 5.389 5.206 5.033 4.868 6.733 6.463 6.210 5.971 5.747 5.535 5.335 7.435 7.108 6.802 6.515 6.247 5.9955.759 8.111 7.722 7.360 7.024 6.710 6.418 6.145 12% 14% 15% 0.893 0.877 0.870 1.690 1.647 1.626 2.402 2.322 2.283 3.037 2.914 2.855 3.605 3.433 3.352 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 16% 0.862 1.605 2.246 2.798 3.274 18% 20% 0.847 0.833 1.566 1.528 2.174 2.106 2.690 2.589 3.127 2.991 3.498 3.326 3.812 3.605 4.078 3.837 4.303 4.031 4.494 4.192 5.795 6.728 7.652 8.566 9.471 5.601 6.472 7.325 8.162 8.983 5.417 6.230 7.020 7.786 8.530 4111 3.889 3.784 4.564 4.288 4.160 4.968 4.639 4.487 5.328 4.946 4.772 5.6505.216 5.019 3.685 4.039 4.344 4.607 4.833 10.368 | 9.787 9.253 8.760 8.306 7.887 7.499 11.255 10.575 9.954 9.385 8.863 8.384 7.943 12.134 | 11.348 10.635 | 9.986 9.394 8.853 8.358 13.004 | 12.106 | 11.296 | 10.563 9.899 9.295 8.745 13 865 12 840 | 11 938 11 118 110 3901 9 712 0108 7.139 6.805 6.495 7.5367.161 | 6.814 7.904 7.487 7.103 8.244 7.786 7.367 8.550 8061 1 7 606 5.938 5.453 6.194 5.660 6.424 5.842 6.628 6.002 6 811 6142 5.234 5.421 5.583 5.724 5 947 5.029 4.656 4.327 5.1974.793 4.439 5.342 4.910 4.533 5.468 5.008 4.611 5575 5092 4675 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 5.1624.730 5.222 4.775 5.273 4.812 5.316 4.844 5.353 4.870 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.9746.265 15.562 14.292 13.166 12.166 11.274 10.4771 9.763 9.122 8.544 8.022 7.1206.373 16.398 14.992 | 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 17.226 15.678 14.32413.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.514 7.469 6.623 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 7.562 6.687 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.2019.442 8.772 7.645 6.743 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 7.718 6.792 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6.835 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.8239.077 7.843 6.873 22.795 20.121 | 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161 7.896 6.906 23.560 20.707 18.327 16.330 14.643 13.211 11.987 10.935 10.027] 9.237 7.943 6.935 24.31621.281 18.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 7.984 6.961 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.0226.983 25.808 22 396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.312 6.359 6.399 6.434 6.464 5.973 6.011 6.044 6.073 6.097 5.384 5.410 5.432 5.451 5.467 4.891 4.909 4.925 4.937 4.948 6.491 6.514 6.534 6.551 6.566 6.118 6.136 6.152 6.166 6.177 5.480 4.956 5.492 4.964 5.502 4.970 5.510 4.975 5.517 4.979 Period 40 8.244 7.105 6.642 6.233 5.548 4.997 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.7579.779 39.196 | 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 Period 50 8.304 7.133 6.661 6.246 5.554 4.999