(Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) What is the NPV of the project? What is the IRR of the project? Is this an acceptable project for Crab? 14. 15. 16. 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a Net Cash Annuity PV Factor (i=16%, n-10) Present Years Inflow Value 1- 10 Present value of annuity Investment
(Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) What is the NPV of the project? What is the IRR of the project? Is this an acceptable project for Crab? 14. 15. 16. 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a Net Cash Annuity PV Factor (i=16%, n-10) Present Years Inflow Value 1- 10 Present value of annuity Investment
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Transcribed Image Text:Crab Company is considering a project with an initial investment of $600,000 that is expected to produce cash inflows of $129,500 for ten years. Crab's required rate of return is 16%.
(Click on the icon to view Present Value of $1 table.)
E (Click on the icon to view Present Value of Ordinary Annuity of $1 table.)
14.
What is the NPV of the project?
15.
What is the IRR of the project?
16.
Is this an acceptable project for Crab?
14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.)
Net Cash
Annuity PV Factor
Present
(i-16%, n=10)
Value
Years
Inflow
1- 10
Present value of annuity
Investment
Net present value
Transcribed Image Text:Reference
Reference
Cra
s required rate of return
Present Value of Ordinary Annuity of $1
Present Value of $1
14
20%
0.870 0.862 0.847 0.833
1.605 1.566 1.528
2.577 2.531 2.487 2.402 2.322 2.283 | 2.246 2.174 2.106
3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798 2.690 2.589
4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991
Periods
1%
2%
3%
5%
6%
7%
8%
9%
10%
12%
14%
15%
16%
18%
Periods
Period 1
Period 2
Period 3
Period 4
Period 5
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
12%
14%
15%
16%
18%
20%
0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893
1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690
2.775 2.723 2.673
15
Period 1
Period 2
Period 3
Period 4
Period 5
0.990 0.980
0.971
0.877
0.990 0.980
0.980 0.961 0.943 0.925 | 0.907 0.890
0.971 0.942 0.915 0.889 | 0.864 0.840
0.961 0.924 0.888 0.855 0.823 0.792 0.763
0.951 0.906 0.863 0.822 0.784 0.747 0.713
0.971 0.962 0.952
0.935
0.877 0.870 0.862 | 0.847
0.926 | 0.917 | 0.909
0.857
0.943
0.893
0.833
0.743 0.718 0.694
0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579
0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482
0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402
1.970
2.941 2.884 2.829
3.902 3.808 3.717
4.853 4.713
16
1.942
1.913
1.647
1.626
0.873
0.816
0.842 0.826 0.797 0.769 0.756
14.
hole dollar. Use parenthe
0.681
Period 6
Period 7
Period 8
Period 9
Period 10
5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111
6.230 6.002 5.786 5.582 5.389
5.795 5.601
6.728 6.472
7.652 7.325 7.020 6.733 6.463 6.210 5.971
8.566 8.162 7.786 | 7.435 7.108 6.802 6.515
3.889| 3.784
0.705 0.666
0.665 | 0.623
3.685 3.498 3.326
4.039 | 3.812 3.605
Period 6
Period 7
Period 8
Period 9
Period 10 0.905 0.820 0.744 0.676 0.614 | 0.558 | 0.508
0,942 0.888 0.837
0,933 0.871 0.813 0.760 | 0.711
0.923 0.853 0.789 0.731 0.677 0.627 0.582
0.914 0.837 0.766 0.703 0.645 0.592 0.544
0.630 |0,596 | 0.564 0.507 | o.456 0.432 0.410 | 0.370 0.335
0.583 0,547 0,513 0.452 | 0.400 0.376 0.354 0.314 0.279
0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233
0.500 0.460 0.424 0.361 0.308 0.284 | 0.263 0.225 0.194
0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162
0.790 0.746
5.206 5.033 4.868
5.747 5.535 5.335 4.968 | 4.639
6.247 5.995 5.759 5.328 4.946
4.564 4.288
4.160
4.344 4.078 3.837
4.772 | 4.607 4.303 4.031
4.833 4.494 4.192
4.487
9.471 8.983
8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216
5.019
Period 11
Period 12
Period 13
Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367
Period 15
10.368 9.787 9.253 | 8.760 | 8.306 7.887 7499
11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814
12.134 11.348 10.635 9.986 9.394 8.853 8.358
7.139 6.805 6.495
5.938 5.453 5.234 5.029 | 4.656 4.327
6.194 5.660
6.424 5.842 5.583 5.342 4.910 4.533
Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475
Period 12
Period 13 0.879 0.773 0.681 0.601 0.530 0.469
Period 14 0.870 0.758
Period 15 0.861 0.743 0.642 0.555 0.481 0.417
0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135
0.397 0.356 0.319 0.257 0.208 0.187 0.168
0.368 0.326 0.290 0.229 0.182
0.340 0.299| 0.263 0.205 0.160 0.141 0.125
0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065
5.421 5.197 4.793 4.439
0.887 0.788 0.701 0.625 0.557 0.497
0.137 0.112
0.116 0.093
0.099 0.078
0.444
7.904 7.487 7.103
0.415
0.163 0.145
6.628
6.002 | 5.724
5.468 5.008 4.611
0.661 0.577 0,505 | 0.442
0.388
13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142
5.847
5.575 5.092 4.675
0.362
Period 16 0.853 0.728 0.623 0.534 0.458
Period 17 0.844 0.714 0.605 0.513 0.436 0.371
Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296
Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277
Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258
0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054
0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 | 0.045
0.250 0.212 0.180 0.130 | 0.095 0.081 0.069 0.051
0.232 0.194 0.164 | 0.116 0.083 0.070 0.060 0.043 0.031
0.215 0.178 0.149 0.104 0.073 0.061 0.051
Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730
Period 17
Period 18
Period 19
Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514| 7.469 6.623
0.394
0.339
15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120
16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467
17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.316 4.844
6.373
6.047
5.749
5.222 4.775
0.317
6.128 5.818 5.273 4.812
0.038
6.259 5.929 5.353 4.870
0.037 0.026
Period 21 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649
Period 22
Period 23 20.456 18.292 16.444
6.312 5.973 5.384 4.891
7.645 6.743 6.359 6.011 | 5.410 4.909
6.399 | 6.044 5.432 4.925
7.562 6.687
Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.242
Period 22 0.803 0.647 0.522 0.422 0.342| 0.278 | 0.226
Period 23 0.795 0.634 0.507 0.406 0.326 | 0.262 | 0.211
Period 24 0.788 0.622 0.492 0.390 0.310 | 0.247 | 0.197
Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.184
0.199 0.164 0.135
0.184 0.1500.123 0.083
0.170 0.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015
0.158 0.1260.102 0.066 0.043 0.035 0.028 0.019 | 0.013
0.146 0.116 | 0.092 0.059 0.038 0.030 0.024 0.016 0.010
0.093 0.064 0.053 0.044 0.031 0.022
0.038 0.026 | 0.018
19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 9.442 8.772
0.056 0.046
4.857 13.489 12.303 11.272 10.371 9.580 8.883 7.718 6.792
Period 24 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784| 6.835| 6.434 6.073 5.451 4.937
Period 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.464 6.097
5.467 4.948
Period 26 22.795 20.121 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161| 7.896 6.906 6.491
Period 27 23.560 20.707 18.327 16.330 14.643 13.211 11.987 10.935 10.027 9.237
Period 28 24.316 21.281 18.764 16.663 14.898 13.406 12.137 11.051 10.116| 9.307
Period 29 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.198| 9.370 8.022 | 6.983 6.551 6.166 5.510 4.975
Period 30 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.566 6.177 5.517 4.979
6.118 5.480 4.956
Period 26 0.772 0,598 0.464 0.361 0.281 0.220 | 0.172
Period 27 0.764 0,586 | 0.450 | 0.347 0.268 | 0,207 0.161
Period 28 0.757 0.574 0.437 0.333 0.255 0.196
Period 29 0.749 0.563 0.424 0.321 0.243 0.185
Period 30 0.742 0.552 0.412 0.308 0.231
0.135 0.106 | 0.084 | 0.053 l0.033 0 026
0.125 0.098 | 0.076 | 0.047 | o.029 0.023
0.116 0.090 0.069 | 0.042
0.107 0.082 0.063 0.037
0.099 0.075 0.057 0.033 | o.020 | 0.015 0.012 0.007 0.004
0.021 0.014 0.009
7.943 6.935
6.514
6.136 5.492 4.964
0.018 | 0.011| 0.007
0.026 0.020 0.016 0.010 0.006
0.022 0.017 0.014 0.008 0.005
7.984 6.961
6.534 6.152 5.502 4.970
0.150
0.141
0.174
0.131
Period 40
32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.244 7.105 6.642 6.233 5.548 4.997
Period 40 0.672 0.453 0.307 0.208 0.142
0.097
0.067
0.046 0.032 0.022 0.011 0.005 0.004 0.003 0.001 0.001
Period 50 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 8.304 7.133 6.661 6.246 5.554 4.999
Period 50 0.608 0.372 0.228 0.141 0.087
0.054
0.034 0.021 0.013 0.009 | 0.003 0.001 0.001 0.001
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