Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A: Costs $275,000 and offers seven annual net cash inflows of $54,000. Vargas Products requires an annual return of 16% on investments of this nature. Project 8: Costs $400,000 and offers 10 annual net cash inflows of $77,000. Vargas 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.) Caciulate 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. Net Cash Present Project 8: Years Annuity PV Factor (1-14%, n=10) Inflow Value 1 - 10 Present value of annuity Choose from any list or enter any number in the input fields and then continue to the next question. I hop Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A: Costs $275,000 and offers seven annual net cash inflows of $54,000. Vargas Products requires an annual return of 16% on investments of this nature. Project B: Costs $400,000 and offers 10 annual net cash inflows of $77,000. Vargas 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 Net present value of Project A Calculate the NPV of Project B. Net Cash Project B: Years 1 - 10 Present value of annuity Annuity PV Factor (i=14%, n=10) Present Value Inflow 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 Choose from any list or enter any number in the input fields and then continue to the next question. Question Help Use the NPV method to determine whether Vargas Products should invest in the following projects: Project A: Costs $275,000 and offers seven annual net cash inflows of $54,000. Vargas Products requires an annual return of 16% on investments of this nature. Project B: Costs $400,000 and offers 10 annual net cash inflows of $77,000. Vargas 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 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 Choose from any list or enter any number in the input fields and then continue to the next question - Reference Present Value of $1 9% Periods 1 2 3 4 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 10% 0.909 0.826 0.751 0.683 0.621 0.917 0.842 0.772 0.708 0.650 15% 0.870 0.756 0.658 0.572 0.497 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 16% 0.862 0.743 0.641 0.552 0.476 un 6 7 0.666 0.623 0.582 0.544 0.508 0.564 0.513 0.467 0.424 0.386 0.790 0.760 0.731 0.703 0.676 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.410 0.354 0.305 0.263 0.227 GO 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.660 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 9 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 10 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.004 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 11 12 13 14 15 0.585 0.557 0.530 0.505 0.481 0.350 0.319 0.290 0.263 0.239 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0439 16 17 18 19 20 0.623 0.605 0.587 0.570 0.554 0.458 0.436 0.416 0.396 0.377 0.359 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.242 0.394 0.371 0.350 0.331 0.312 0.292 0.270 0.250 0.232 0.215 0.199 0.252 0.231 0.212 0.194 0.178 0.218 0.198 0.180 0.164 0.149 0.163 0.146 0.130 0.116 0.104 0.093 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.044 0.123 0.108 0.095 0.083 0.073 0.107 0.093 0.081 0.070 0.061 0.071 0.060 0.051 0.043 0.037 0.054 0.045 0.038 0.031 0.026 0.022 0.135 0.294 0.064 0.164 0.053 0.811 21 0.031 0.538 Print Done - NI i Reference ect ech litu TU U.YU5 V.OZU ck 0.804 0.788 11 12 13 14 15 0.896 0.887 0.879 0.870 0.861 0.469 0.773 0.758 0.743 em 16 17 18 19 20 0.377 0.853 0.844 0.836 0.828 0.820 0.811 0.803 0.795 0.788 0.780 0.728 0.714 0.700 0.686 0.673 0.660 0.647 0.634 0.622 0.610 U.74 VOTO V.014 U.350 4.500 0.403 6.422 U.300 U.SZZ UZTU U.ZZT U.TM U.T02 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 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 0.681 0.601 0.530 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 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 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0218 0.163 0.123 0.107 0.093 0.071 0.054 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 0.587 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 0.570 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 0.554 0.456 0.312 0.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 0.538 0.439 0.359 0.294 0.242 0.199 0.164 0.135 0.093 0.064 0.053 0.044 0.031 0.022 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 0.507 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 0.492 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.066 0.043 0.035 0.028 0.019 0.013 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.059 0.038 0.030 0.024 0.016 0.010 0.464 0.361 0.281 0220 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 0.450 0.347 0.268 0207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.018 0.011 0.007 0.437 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.042 0.026 0.020 0.016 0.010 0.006 0.424 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.037 0.022 0.017 0.014 0.008 0.005 0.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.033 0.020 0.015 0.012 0.007 0.004 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.0110.005 0.004 0.003 0.001 0.001 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.003 0.001 0.001 0.001 tA UB 21 22 23 24 25 26 27 28 29 30 40 50 rem the 0.772 0.598 0.764 0.586 0.757 0.574 0.749 0.563 0.742 0.552 0.672 0.453 0.608 0.372 ect ect se fra Print Done Reference Periods 1 2 3 4 5 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 8 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2577 2.531 2.487 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4486 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.578 12.561 11.652 10.838 10.1069.447 8.851 8.313 7.824 15.562 14.292 13.166 12.166 11.274 10.4779.763 9.122 8.544 8.022 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 18.046 16.351 14.877 13.590 12.462 11.470 10.594 | 9.818 9.129 8.514 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.0179.292 8.649 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.326 3.605 3.837 4.031 4.192 9 10 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.029 5.197 5.342 5.468 5.575 11 12 13 14 15 16 17 18 19 20 21 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 6.974 7.120 7.250 7.366 7.469 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.844 4.870 4.891 7.562 6.687 6.312 5.973 5.384 Print Done X i Reference DUTY 4.035 4.494 TU 11 12 13 14 15 4.192 4.327 4.439 4.533 4.611 4.675 16 17 18 19 20 9.471 0.903 0.330 7.12Z 7.300 T.UZ 0./ TU 0.410 0.143 3.030 3.210 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6,814 6.194 5.660 12.134 11.348 10.6359.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 15.562 14.292 13.166 12.166 11.274 10.4779.763 9.122 8.544 8.022 7.120 6.373 16.398 14.992 13.754 12.659 11.690 10.828 10.0599.372 8.756 8.201 7.250 6.467 17.226 15.678 14.324 13.134 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 10.201 9.442 8.772 7.645 6.743 20.456 18.292 16.444 14.85713.489 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 9.823 9.077 7.843 6.873 22.795 20.12117.877 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 13.21111.987 10.935 10.027 9.237 7.943 6.935 24.316 21.28118.764 16.663 14.898 13.406 12.13711.051 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 8.022 6.983 25.80B 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.2749.427 8.055 7.003 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.244 7.105 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 8.304 7.133 21 22 23 24 25 5.234 5.029 4.656 5.421 5.197 4.793 5.583 5.342 4.910 5.724 5.468 5.008 5.847 5.575 5.092 5.954 5.669 5.162 6.047 5.749 5.222 6.128 5.818 5.273 6.198 5.877 5.316 6.259 5.929 5.353 6.312 5.973 5.384 6.359 6.011 5.410 6.399 6.044 5.432 6.434 6.073 5.451 6.464 6.097 5.467 6.491 6.118 5.480 6.514 6.136 5.492 6.534 6.152 5.502 6.551 6.166 6.566 6.177 5.517 6.642 6.233 5.548 6.661 6.246 5.554 4.730 4.775 4.812 4.844 4.870 4.891 4.909 4.925 4.937 4.948 26 27 28 29 30 5.510 4.956 4.964 4.970 4.975 4.979 4.997 40 50 4.999 Print Done