X CengageNOWv2 | Online teachin x + C D A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Week 5 CNOW Assignment Feedback 1. MP.NPV.AND.IRR Check My Work 2. MP.PAYBACK.AND.AVG.RA... . Click on the Present Value of an Annuity of $1 at Compound Interest link and look for the intersection of the number of years row and the required rate of return column. 3. MP. TIME. VALUE.OF.MONEY Part Three Present Value Index When funds for capital investments are limited, projects can be ranked using a present value index. A project with a negative net present value will have a present value index below 1.0. Also, it is important to note that a project with the largest net present value may, in fact, return a lower present value per dollar invested. Let's look at an example of how to determine the present value index. The company has a project with a 5-year life, an initial investment of $220,000, and is expected to yield annual cash flows of $55,000. Whathat is the present value index of the project if the required rate of return is set at 10%? Total present value of net cash flows Present value index Initial investment Calculation Steps Note: Round total present value of net cash flows and initial investment to nearest dollar. Round present value index to two decimal places. $ 212,421 X Present value index = $ 220,000 1.10 X