Net present valueA project has estimated annual net cash flows of $5,000 for 1 years and is estimated to cost $32,500. Assume a minimum acceptabile rate of return of 10%.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%0.9090.8930.8701.7361.6901.6262.4872.4022.2833.1703.0372.8553.7913.605 3.3532.9914.3554.1113.785 3.3264.868 4.564 4.1603.6055.335 4.9684.4873.83795.7595.3284.772 4.031107.3606.1455.650 5.0194.192Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value.Net present value of the project (round to the nearest dollar)Present value index (rounded to two decimal places)123456780.9431.8332.6733.4654.2124.9175.5826.2106.8020.8331.5282.1062.589

NPV denotes the net value of the cash flow from the project which may be either positive or…

GAL VARUO of an Annuity esent Value of an Annuity of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.909 0.870 1.833 1.736 2.673 2.487 3.465 3.170 4.212 3.791 4.355 4.868 5.335 5.759 par 1 2 3 4 5 6 7 8 9 4.917 5.582 6.210 6.802 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4,968 5.328 pound Interest table below. 0.833 1.528 2.283 2.106 2.855 2.589 3.353 2.991 3.785 3.326 4.160 3.605 4.487 3.837 4.772 1.626 4.031

GAL VARUO of an Annuity esent Value of an Annuity of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.909 0.870 1.833 1.736 2.673 2.487 3.465 3.170 4.212 3.791 4.355 4.868 5.335 5.759 par 1 2 3 4 5 6 7 8 9 4.917 5.582 6.210 6.802 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4,968 5.328 pound Interest table below. 0.833 1.528 2.283 2.106 2.855 2.589 3.353 2.991 3.785 3.326 4.160 3.605 4.487 3.837 4.772 1.626 4.031

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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