The wind turbines require an investment of $713,750, whi the biofuel equipment requires an investment of $1,518,500. No residual value is expected from either project. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.833 2 1.833 1.528 3 2.673 2.106 4 3.465 2.589 ) 5 4.212 2.991 6 4.917 3.326 5.582 3.605 6.210 4.487 3.837 6.802 4.772 4.031 7.360 5.019 4.192 7 8 9 10 Required: Net present value. 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 Present value of annual net cash flows Amount to be invested. 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 Wind Turbines Biofuel Equipment 1a. Compute the net present value for each project. Use rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar. 0.870 Internal rate of return 1.626 2.283 Present value factor for an annuity of $1 2.855 3.353 3.785 4.160 Wind Turbines. Biofuel Equipment $ $ 1b. Compute a present value index for each project. If required, round your answers to two decimal places. Present Value Index $ $ 2. Determine the internal rate of return for each project E (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. Wind Turbines % B
The wind turbines require an investment of $713,750, whi the biofuel equipment requires an investment of $1,518,500. No residual value is expected from either project. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.833 2 1.833 1.528 3 2.673 2.106 4 3.465 2.589 ) 5 4.212 2.991 6 4.917 3.326 5.582 3.605 6.210 4.487 3.837 6.802 4.772 4.031 7.360 5.019 4.192 7 8 9 10 Required: Net present value. 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 Present value of annual net cash flows Amount to be invested. 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 Wind Turbines Biofuel Equipment 1a. Compute the net present value for each project. Use rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar. 0.870 Internal rate of return 1.626 2.283 Present value factor for an annuity of $1 2.855 3.353 3.785 4.160 Wind Turbines. Biofuel Equipment $ $ 1b. Compute a present value index for each project. If required, round your answers to two decimal places. Present Value Index $ $ 2. Determine the internal rate of return for each project E (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. Wind Turbines % B
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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