The company requires a 8% return from its investments. Compute net present values using factors from Table 8.1 in Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar) Project C1 Year 1 Year 2 Year 3 Totals Project C2 Year 1 Year 2 Year 3 Totals Net Cash Flows $ $ 44,000 x 140,000 x 200,000 x 384,000 Net Cash Flows 0 Present Value of 1 at 8% Present Value of 1 at 8% Present Value of Net Cash Flows Present Value of Net Cash Flows
The company requires a 8% return from its investments. Compute net present values using factors from Table 8.1 in Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar) Project C1 Year 1 Year 2 Year 3 Totals Project C2 Year 1 Year 2 Year 3 Totals Net Cash Flows $ $ 44,000 x 140,000 x 200,000 x 384,000 Net Cash Flows 0 Present Value of 1 at 8% Present Value of 1 at 8% Present Value of Net Cash Flows Present Value of Net Cash Flows
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
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Question
Transcribed Image Text:Required A
Required B
The company requires a 8% return from its investments. Compute net present values using factors from Table B.1 in
Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated with a
minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar)
Project C1
Year 1
Year 2
Year 3
Totals
Project C2
Year 1
Year 2
Year 3
Totals
Net Cash Flows
$
$
Net Cash Flows
$
44,000 x
140,000 x
200,000 x
384,000
Which projects, if any, should be accepted
Show Transcribed Text
x
0
X
Present Value
of 1 at 8%
Present Value
of 1 at 8%
Ĵ
Present Value of
Net Cash Flows
() is the internal rate of retum higher or lower than 8% for Project C17
() is the internal rate of return higher or lower than 8% for Project C27
< Required A
Present Value of
Net Cash Flows
a. The company requires a 8% return from its investments. Compute net present values using factors from Table B.1 in Appendix 8 to
determine which projects, if any, should be accepted.
b. Using the answer from part a, is the internal rate of return higher or lower than 8% for () Project C1 and (i) Project C2? Hint: It is not
necessary to compute IRR to answer this question.
Complete this question by entering your answers in the tabs below.
Required A Required B
Using the answer from part a, is the internal rate of return higher or lower than 8% for (0) Project C1 and (1) Project
C27 Hint: It is not necessary to compute IRR to answer this question
Transcribed Image Text:Exercise 24-18 (Algo) Net present value, unequal cash flows, and internal rate of return LO P3, P4
Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $324,000 and would yield the
following annual net cash flows. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.)
Net cash flows
Year 1
Year 2
Year 3
Totals
Project C1
$ 44,000
140,000
200,000
$384,000
Project C2
$ 128,000
128,000
128,000
$ 384,000
a. The company requires a 8% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to
determine which projects, if any, should be accepted.
b. Using the answer from part a, is the internal rate of return higher or lower than 8% for (1) Project C1 and (ii) Project C2? Hint: It is not
necessary to compute IRR to answer this question.
Complete this question by entering your answers in the tabs below.
Proiect C1
Required A Required B
The company requires a 8% return from its investments. Compute net present values using factors from Table 8.1 in
Appendix B to determine which, projects, if any, should be accepted. (Negative net present values should be indicated with a
minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar)
Present Value of
Net Cash Flows x Present Value
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