Don't give answer in image Net Present ValueA project has estimated annual net cash flows of $10,000 for nine years and is estimated to cost $35,000. Assume a minimumacceptable rate of return of 12%. Use the Present Value of an Annuity of $1 at Compound Interest table below.Present Value of an Annuity of $1 at Compound InterestYear6%10%12%15%20%0.9090.8700.8331.7361.6261.5282.4872.2832.1063.1702.8552.5893.7913.3532.9913.3263.6053.8371234560.943781.8332.6733.4654.2120.8931.6902.4023.0373.6054.9174.3555.5824.8604.5646.2105.3354.9686.8025.7595.328107.3606.1455.650Determine (1) the net present value of the project and (2) the present value index. If required, use the minus sign to indicate anegative net present value.4.1113.7854.1604.4874.7725.0194.0314.192Net present value of the project (round to the nearest dollar)Present value index (rounded to two decimal places)

Annual net cash flows = $10,000Discount rate = 12%Initial cost of investment = $35,000Formulas:

Net Present Value A project has estimated annual net cash flows of $10,000 for nine years and is estimated to cost $35,000. Assume a minimum acceptable rate of return of 12%. Use the Present Value of an Annuity of $1 at Compound Interest table below.

Net Present Value A project has estimated annual net cash flows of $10,000 for nine years and is estimated to cost $35,000. Assume a minimum acceptable rate of return of 12%. Use the Present Value of an Annuity of $1 at Compound Interest table below.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3BE

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