Use the NPV method to determine whether Stenback Products should invest in the following projects: Project A: Costs $270,000 and offers seven annual net cash inflows of $52,000. Stenback Products requires an annual return of 16% on investments of this nature. Project B: Costs $385,000 and offers 10 annual net cash inflows of $75,000. Stenback Products demands an annual return of 14% 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, X.XXX. 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=16%, n=7) Value 1-7 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project B. Project B: Net Cash Present Annuity PV Factor (i=14%, n=10) Years Inflow Value 1 - 10 Present value of annuity 0 Investment Net present value of Project B Requirement 2. What is the maximum acceptable price to pay for each project? Maximum Acceptable Price Project A Project B Requirement 3. What is the profitability index of each project? (Round to two decimal places, X.XX.) Select the formula, then enter the amounts to calculate the profitability index of each project. = Profitability Index Project A = . Project B = Reference Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 Period 7 0.933 0.871 0.813 0.7600.711 0.665 0.623 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 Period 11 0.896 0.8040.722 0.650 0.585 0.527 0.475 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 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 non LA 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.397 0.356 0.319 | 0.257 0.208 0.187 0.1680.137 0.112 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.340 0.299 0.263 0.205 0.1600.141 0.125 0.099 0.078 0.315 0.275 0.2390.183 0.140 0.123 0.108 0.084 0.065 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.270 0.231 0.1980.146 0.108 0.093 0.080 0.060 0.045 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 A AA AAA AAAA = Print Done Reference Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.6901.647 1.626 1.605 1.566 1.528 Period 3 2.9412.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 | 2.855 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 4.607 4.303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.6505.216 5.019 4.833 4.494 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.1616.814 6.194 5.660 5.421 5.197 4.793 4.439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 5.583 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.0084.611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 5.092 4.675 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730 Period 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 Period 18 16.398 14.992 | 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 | 6.128 5.818 5.273 4.812 Period 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 | 7.366 6.550 6.198 5.877 5.316 4.844 10A AP Ann An | Print Done