Amount to be invested. $642,200 $399,673 $242,190 Annual net cash flows: Year 1 307,000 206,000 135,000 Year 2 286,000 185,000 93,000 Year 3 261,000 165,000 68,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 st 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 6 0.592 0.424 0:361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value of $1 table presented above in your computations. If the net present value is negative, enter a negative amount. Product Line Expansion Present value of net cash flow total Amount to be invested Net present value Distribution Facilities Computer Network 2. Determine a present value index for each proposal. Round your answers to two decimal places. Present Value Index (Rounded) < Product Line Expansion Distribution Facilities Computer Network 3. The distribution facilities returns less has the lowest net present value and it as revealed by the present has the largest present value index. Thecomputer network present value per dollar invested than both the product line and distribution facilities is less than 1, indicating that it does not meet the minimum rate of return value indexes. The present value index for the computer network standard. Feedback for 0.pdf
Amount to be invested. $642,200 $399,673 $242,190 Annual net cash flows: Year 1 307,000 206,000 135,000 Year 2 286,000 185,000 93,000 Year 3 261,000 165,000 68,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 st 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 6 0.592 0.424 0:361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value of $1 table presented above in your computations. If the net present value is negative, enter a negative amount. Product Line Expansion Present value of net cash flow total Amount to be invested Net present value Distribution Facilities Computer Network 2. Determine a present value index for each proposal. Round your answers to two decimal places. Present Value Index (Rounded) < Product Line Expansion Distribution Facilities Computer Network 3. The distribution facilities returns less has the lowest net present value and it as revealed by the present has the largest present value index. Thecomputer network present value per dollar invested than both the product line and distribution facilities is less than 1, indicating that it does not meet the minimum rate of return value indexes. The present value index for the computer network standard. Feedback for 0.pdf
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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