Use the NPV method to determine whether Smith Products should invest in the following projects: Project A costs $290,000 and offers seven annual net cash inflows of $60,000. Smith Products requires an annual return of 16% on projects like A. Project B costs $375,000 and offers ten annual net cash inflows of $73,000. Smith Products demands an annual return of 10% on investments of this nature. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) Requirement (Click the icon to view the present value table.) (Click the icon to view the future value table.) What is the NPV of each project? What is the maximum acceptable price to pay for each project? Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV of Project A is Present Value of Annuity of $1 Periods Period 13 12.134 Period 14 13.004 Period 15 13.865 7.108 6.802 6.247 5.759 5.328 7.722 7.360 6.710 6.145 5.650 8.306 7.887 7.139 6.495 5.938 8.863 8.384 7.536 6.814 6.194 9.394 8.853 7.904 7.103 6.424 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 Period 7 6.728 6.472 6.230 6.002 Period 8 7.652 7.325 7.020 6.733 Period 9 8.566 8.162 7.786 7.435 Period 10 9.471 8.983 8.530 8.111 Period 11 10.368 9.787 9.253 8.760 Period 12 11.255 10.575 9.954 9.385 11.348 10.635 9.986 5.076 4.917 4.623 4.355 4.111 5.786 5.582 5.206 4.868 4.564 6.463 6.210 5.747 5.335 4.968 3.889 3.685 3.498 3.326 4.288 4.039 3.812 3.605 4.639 4.344 4.078 3.837 4.946 4.607 4.303 4.031 5.216 4.833 4.494 4.192 5.453 5.029 4.656 4.327 5.660 5.197 4.793 4.439 5.842 5.342 4.910 4.533 6.002 5.468 5.008 4.611 6.142 5.575 5.092 4.675 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 6.623 5.929 5.353 4.870 6.873 6.097 5.467 4.948 7.003 6.177 5.517 4.979 7.105 6.233 5.548 4.997 Present Value of $1 Periods 1% 2% 3% Period 1 0.990 0.980 0.971 Period 2 0.980 0.961 0.943 Period 3 0.971 0.942 0.915 Period 6 Period 7 0.942 0.933 Period 8 0.923 0.853 0.789 0.731 Period 9 0.914 0.837 0.766 0.703 Period 10 0.905 0.820 0.744 0.676 0.614 0.677 0.627 0.540 0.645 0.592 0.500 0.558 0.463 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.889 0.864 0.840 0.794 0.751 0.712 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.467 0.404 0.424 0.361 0.386 0.322 0.862 0.847 0.833 0.743 0.718 0.694 0.675 0.641 0.609 0.579 0.592 0.552 0.516 0.482 0.519 0.476 0.437 0.402 0.351 0.305 0.266 0.233 0.308 0.270 0.263 0.225 0.194 0.227 0.191 0.162 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.429 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 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 0.368 0.340 0.290 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.350 0.287 0.237 0.195 0.257 0.208 0.168 0.229 0.182 0.145 0.116 0.093 0.263 0.205 0.160 0.125 0.099 0.078 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.162 0.135 0.137 0.112 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 Period 30 0.742 0.552 0.412 0.308 0.231 0.174 0.099 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.046 0.149 0.104 0.092 0.059 0.057 0.033 0.022 0.011 0.073 0.051 0.037 0.026 0.038 0.024 0.016 0.010 0.020 0.012 0.007 0.004 0.005 0.003 0.001 0.001 Future Value of Annuity of $1 Periods 1% 2% 3% 4% 5% Period 1 1.000 Period 2 2.010 1.000 1.000 2.020 2.030 1.000 6% 1.000 1.000 1.000 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.00 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.20 Period 3 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.64 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 5.215 5.36 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.44 Period 6 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.93 Period 7 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12.9 Period 8 Period 9 Period 10 8.286 8.583 8.892 9.369 9.214 9.549 9.897 9.755 10.159 10.583 11.027 11.491 10.462 10.950 11.464 12.006 12.578 13.181 10.637 11.436 12.300 13.233 12.488 13.579 14.776 16.085 14.487 15.937 17.549 19.337 21.321 14.240 15.327 16.4 17.519 19.086 20.7 23.521 25.9 Period 11 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 Period 12 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 Period 13 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 Period 14 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 Period 15 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 Period 20 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 Period 25 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 Period 30 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494|241.333 356.787 530.312 790.948 1,181 Period 40 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343 91.025 23.045 25.733 28.755 32.1 27.271 32.089 37.581 30.850 34.931 39.5 36.786 42.219 48.4 43.842 115.380 249.214 43.672 50.818 59.1 51.660 60.965 72.0 146.628 186.6 342.603 471.9 Future Value of $1 Periods 1% 2% 3% 4% 5% Period 1 1.010 1.020 1.030 1.040 1.050 Period 2 1.020 1.040 1.061 1.082 1.103 1.124 1.166 Period 3 1.030 1.061 1.093 1.125 1.158 1.191 1.260 Period 4 1.041 1.082 1.126 1.170 1.216 Period 5 1.051 1.104 1.159 1.217 1.276 Period 6 1.062 1.126 1.194 Period 7 1.072 1.149 1.230 1.316 1.407 Period 8 1.083 1.172 1.267 1.369 1.477 Period 9 1.094 1.195 1.305 1.423 6% 8% 1.060 1.080 1.100 1.210 1.331 1.405 1.482 1.262 1.360 1.464 1.574 1.689 1.811 1.338 1.469 1.611 1.762 1.925 2.100 1.265 1.340 1.419 1.587 1.772 1.974 2.195 2.436 2.700 1.504 1.714 1.949 2.211 2.502 2.826 3.185 1.594 1.851 2.144 2.476 2.853 3.278 3.759 4.300 1.551 1.689 1.999 2.358 2.773 10% 12% 14% 1.120 1.140 1.254 16% 18% 20% 1.160 1.180 1.200 1.300 1.346 1.392 1.440 1.561 1.643 1.728 1.939 2.074 2.288 2.488 2.986 3.583 3.252 3.803 4.435 5.160 Period 10 1.105 1.219 1.344 1.480 1.629 1.791 2.159 2.594 3.106 3.707 4.411 5.234 6.192 Period 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 2.853 3.479 4.226 5.117 6.176 Period 12 1.127 1.268 1.426 1.601 1.796 2.012 2.518 3.138 3.896 4.818 Period 13 1.138 1.294 1.469 1.665 1.886 2.133 2.720 Period 14 1.149 1.319 1.513 1.732 1.980 2.261 2.937 3.797 3.452 4.363 5.492 4.887 Period 15 1.161 1.346 1.558 1.801 2.079 2.397 3.172 4.177 5.474 7.430 5.936 7.288 8.916 6.886 8.599 10.699 6.261 7.988 10.147 12.839 7.138 9.266 11.974 15.407 Period 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 Period 25 1.282 Period 30 1.348 Period 40 1.489 1.641 2.094 2.666 3.386 4.292 13.743 19.461 27.393 38.338 6.848 10.835 17.000 26.462 40.874 62.669 1.811 2.427 3.243 4.322 5.743 95.396 10.063 17.449 29.960 50.950 85.850 143.371 237.376 2.208 3.262 4.801 7.040 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1,469.772