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
Related questions
Question
2
Transcribed Image Text: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
Transcribed Image Text: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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education