Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A: Costs $260,000 and offers seven annual net cash inflows of $56,000. Vargas Products requires an annual return of 12% on investments of this nature. Project B: Costs $390,000 and offers 9 annual net cash inflows of $70,000. Vargas Products demands an annual return of 10% 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: Present Net Cash Inflow Annuity PV Factor (i=12%, n=7) Years Value 1-7 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project B. Calculate the NPV of Project B. Project B: Years 1-9 Present value of annuity Net Cash Inflow Annuity PV Factor (i=10%, n=9) Present Value 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.) 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. Present value of net cash inflows 7 Initial investment = Profitability Index Project A Project B Present Value of $1 Periods Ovo AWN 1% 2% 3% 4% 5% | 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 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 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.7180.694 0.971 0.942 0.915 0.889 0.864 | 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.961 0.924 | 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 | 0.592 0.572 0.552 0.516 | 0.482 0.951 0.906 0.863 0.822 0.784 | 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 | 0.402 0.942 0.888 0.837 0.790 0.746 | 0.705 0.666 0.630 0.596 0.564 0.507 | 0.456 0.432 0.410 0.370 0.335 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.5830.547 0.513 0.452 | 0.400 0.376 0.354 0.314 | 0.279 0.923 0.853 0.789 0.731 0.677 0.627 0.5820.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.914 0.837 0.766 0.703 0.6450.5920.544 | 0.500 0.460 | 0.424 0.361 | 0.308 0.284 | 0.263 0.225 0.194 0.905 0.820 0.744 0.676 0.614 0.558 0.508 | 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.896 0.804 0.722 0.650 0.585 0.527 0.475 | 0.429 0.388 0.350 0.287 | 0.237 0.215 0.1950.162 0.135 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 | 0.257 0.208 0.187 0.168 0.137 0.112 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 | 0.160 0.141 0.125 0.099 0.078 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 4080 084 0.065 0.853 0.7280.623 0.534 0.458 0.394 0.3390.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 0.820 0.673 0.554 0.456 0.377 0.3120.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 0.811 | 0.660 0.538 0.439 0.359 0.2940.242 0.1990.1640.135 0.093 0.064 0.053 0.044 0.031 | 0.022 90210 617 1 05021012210 212 10 270 1 0 226 10 101 10150 10 122 1 0002 1 056 1 2016 1 020 1026 L 0010 14.353 4.078 Present Value of Ordinary Annuity of $1 | Pariods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% || 19% | 10% | 12% | 14% | 15% | 16% | 18% | 20% 10.990 | 0980 | 0971 | 0962 | 0952 | 0943 | 0935 | 0926 | 0917] 0909 | 0.893 | 0.877 | 0.870 | 0.862 | 0.847 | 0.833 1970 || 1942 1 19131 1.886 11858 | | 1.833 | 1.808 | 1783 | 1759 | 1.736 1.690 | 1.647 | 1.626 | 1.605 | 1.566 | 1.528 2941 2.884 | 2.829 | 2775 | 2.723 | 2673 | 2.624 | 2.577 | 2.531 2487 2402 | 2322 | 2.283 2.246 | 2.174 | 2.106 3.902 3.808 | 3717 | 3.630 3.546 3.465 3.387 | 3312 13.240 | 3.170 3.037 | 2914 2855 2.798 | 2.690 2.589 4.713 4.580 | 4.452 4.329 ) 4.212 4.100 13.993 | 3.890 3.791 3.605 | 3433 3.352 3.274 3.127 | 2.991 15.795 5.601 5.417 | 5.242 5.076 4.917 4.767 | 4.623 | 4.486 4.355 4.111 | 3.889 13.784 3.685 13.498 | 3.326 6.728 6.472 6.230 6002 5.786 5.582 5.389 | 5.206 | 15.033 4.868 14.564 | 4.288 4.160 4.039 3812 13.605 7.652 7.325 7.020 16.733 6.463 6210 5971 5.747 15.535 5.335 4.968 | 4.639 4.487 4.344 | 3.837 8.566 8.162 7.786 | | 7.435 7.108 6.802 6.515 16.247 15995 5.759 5.328 | 4.946 4.772 4.607 4.303 | 4.031 19471 | 8.983 18.530 | 8.111 7.722 7.360 7.024 | 16.710 | 6.418 6.145 5.650 | 5.216 5.019 4.833 4.494 | 4.192 10.368) 9.787 9253 | 8.760 | 8.306 7.887 7499 | 7.139 | | 6.805 | 6.495 5.938 | 5.453 5.234 5.029 4.656 | 4.327 10.575 9954 | 9.365 | 8.863 8.384 7.943 7.536 | 7.161 16.814 6.194 5.660 5.421 5.197 4.793 | 4.439 11.348 | 10.635 | 9986 19394 | 8853 8.358 7.904 | 17.487 | 7.103 6.424 5.842 5.583 5.342 4.910 | 4.533 13.004 | 12.106 | 11.296 | 10.563 | 9899 | 9.295 8.745 8.244 | 7.786 | 7367 6628 | 6.002 5.724 5.468 5.008 | 4.611 13.865 | 12.849 | 11.938 | 11.118 | 10.380 | | 9712 | 9.108 8.559 18.061 7.606 16.811 6.142 5.847 5.575 5.092 | 4.675 13.578 | 12.561 | 11.652 | 10.838| 10.106 | 9447 | 8851 | 8.313 7.824 6.974 | 6.265 15954 5.669 5.162 | 4.730 14.292 | 13.166 | 12.166 | 11.274 | 10.477 19763 9.122 | 8.544 8.022 7.120 | 6373 6.047 5.749 5.222 14.775 14.992 | 13.754 | 12.659 | 11.69 10.828 | 10.059 | | 9.372 18.756 820* 7.250 | 6.467 6.128 15.818 5273 14.812 17.226 | 15.678 | 14.324 | 13.134 | 12.085 | 11.158 | 10.336 | 9604 | 8950 | 8.365 7.366 | 6.550 16.198 | 5.877 5.316 | 4.844 18.046| 16.351| 14.877 | 13.590 | 12.462 | 11.470 |10.594 | 9.818 19.129 | 8.514 | 6.623 6.259 | 5.929 5.353 | 4.870 18.857 | 17.011 | 15.415 | 14.029 | 12.821 | 11.764 | 10.836 | 10.017] 9.292 | 8.649 | 7.562 | 6.687 | 6312 | 5973 | 5.384 | 4.891 Eeal 17 EEclic 027 |A ME 246zlidal 4 Sel 4000+ ladela770 li As leglesalen4 ls4all God, (434 7.468 |