Use the NPV method to determine whether Juda Products should invest in the following projects: Project A costs $260,000 and offers seven annual net cash inflows of $59,000. Juda Products requires an annual return of 12% on projects like A. • Project B costs $380,000 and offers nine annual net cash inflows of $73,000. Juda Products demands an annual return of 14% on investments of this nature. (Click the icon to view the present value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) =(Click the icon to view the future value table.) Requirement What is the NPV of each project? What is the maximum acceptable price to pay for each project? Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV of Project A is 5)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Present Value of Annuity of $1
Periods
1%
2%
3%
4%
5%
6%
8%
10%
12%
14%
16%
18%
20%
Period 1
Period 2
Period 3
Period 4
Period 5
0.980 0.971 0.962 0952 0.943 0.926 0.909 0.893
1.942 1.913 1.886 1859 1.833 1.783 1.736 1.690
2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402
3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914
4.713 4.580 4.452
0.990
0.877
0.862
0.847
0.833
1.970
1.647
1.605
1.566
1.528
2.941
2.322
2.246
2.174
2.106
3.902
2.798
2.690
2.589
4.853
4.329 4212 3.993 3.791 3.605
3.433
3.274
3.127
2.991
Period 6
Period 7
Period 8
Period 9
Period 10 9.471
5.795
5.601 5.417 5.242
5.076 4.917 4.623 4.355 4.111
6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564
6.210 5.747 5.335 4.968
6.247 5.759 5.328
7722 7.360 6.710 6.145 5.650
3.889
3.685
3.498
3.326
6.728
4.288
4.039
3.812
3.605
7.652 7.325 7.020 6.733 6.463
8.162 7786 7 435
8.983 8.530 8.111
4.639
4.344
4.078
3.837
8.566
7.108 6.802
4.946
4.607
4.303
4.031
5.216
4.833
4.494
4.192
Period 11 10.368 9.787 9.253 8.760
Period 12 11.255 10.575 9.954 9.385
Period 13 12.134 11.348 10.635 9.986 9.394
Period 14 13.004 12.106 11.296 10.563 9.899
Period 15 13.865 12.849 11.938 11.118 10.380 9.712
8.306 7 887 7.139 6.495 5938
7536 6.814 6.194
7 904 7 103 6 424
8.244 7.367 6.628
8.559 7.606 6.811
5.453
5.029
4.656
4.327
8.863
8.384
8.853
5.660
5.197
4.793
4.439
5.842
5.342
4.910
4.533
9.295
6.002
5.468
5.008
4.611
6.142
5.575
5.092
4.675
Period 20 18.046 16.351 14.877 13.590 12.462 11 470 9.818 8.514
Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077| 7.843
Period 30 25.808 22.396 19.600 17 292 15.372 13.765 11.258 9.427 8.055
Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244
7.469
6.623
5 929
5.353
4.870
6.873
6.097
5.467
4.948
7.003
6.177
5.517
4.979
7.105
6.233
5.548
4.997
Print
Done
Transcribed Image Text:Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 Period 2 Period 3 Period 4 Period 5 0.980 0.971 0.962 0952 0.943 0.926 0.909 0.893 1.942 1.913 1.886 1859 1.833 1.783 1.736 1.690 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 4.713 4.580 4.452 0.990 0.877 0.862 0.847 0.833 1.970 1.647 1.605 1.566 1.528 2.941 2.322 2.246 2.174 2.106 3.902 2.798 2.690 2.589 4.853 4.329 4212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 Period 7 Period 8 Period 9 Period 10 9.471 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 6.210 5.747 5.335 4.968 6.247 5.759 5.328 7722 7.360 6.710 6.145 5.650 3.889 3.685 3.498 3.326 6.728 4.288 4.039 3.812 3.605 7.652 7.325 7.020 6.733 6.463 8.162 7786 7 435 8.983 8.530 8.111 4.639 4.344 4.078 3.837 8.566 7.108 6.802 4.946 4.607 4.303 4.031 5.216 4.833 4.494 4.192 Period 11 10.368 9.787 9.253 8.760 Period 12 11.255 10.575 9.954 9.385 Period 13 12.134 11.348 10.635 9.986 9.394 Period 14 13.004 12.106 11.296 10.563 9.899 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.306 7 887 7.139 6.495 5938 7536 6.814 6.194 7 904 7 103 6 424 8.244 7.367 6.628 8.559 7.606 6.811 5.453 5.029 4.656 4.327 8.863 8.384 8.853 5.660 5.197 4.793 4.439 5.842 5.342 4.910 4.533 9.295 6.002 5.468 5.008 4.611 6.142 5.575 5.092 4.675 Period 20 18.046 16.351 14.877 13.590 12.462 11 470 9.818 8.514 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077| 7.843 Period 30 25.808 22.396 19.600 17 292 15.372 13.765 11.258 9.427 8.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.469 6.623 5 929 5.353 4.870 6.873 6.097 5.467 4.948 7.003 6.177 5.517 4.979 7.105 6.233 5.548 4.997 Print Done
E12-29A (similar to)
Question Help
Use the NPV method to determine whether Juda Products should invest in the following projects:
Project A costs $260,000 and offers seven annual net cash inflows of $59,000. Juda Products requires an annual return
of 12% on projects like A.
Project B costs $380,000 and offers nine annual net cash inflows of $73,000. Juda Products demands an annual return of
14% on investments of this nature.
(Click the icon to view the present value annuity table.)
(Click the icon to view the present value table.)
(Click the icon to view the future value annuity table.)
(Click the icon to view the future value table.)
Requirement
What is the NPV of each project? What is the maximum acceptable price to pay for each project?
Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for
negative net present values.)
le
The NPV of Project A is
5)
5)
n: Man
eserve
Enter any number in the edit fields and then click Check Answer.
3 parts
remaining
Clear All
Check Answer
AIlrights
Transcribed Image Text:E12-29A (similar to) Question Help Use the NPV method to determine whether Juda Products should invest in the following projects: Project A costs $260,000 and offers seven annual net cash inflows of $59,000. Juda Products requires an annual return of 12% on projects like A. Project B costs $380,000 and offers nine annual net cash inflows of $73,000. Juda Products demands an annual return of 14% on investments of this nature. (Click the icon to view the present value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Requirement What is the NPV of each project? What is the maximum acceptable price to pay for each project? Calculate the NPV of each project. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) le The NPV of Project A is 5) 5) n: Man eserve Enter any number in the edit fields and then click Check Answer. 3 parts remaining Clear All Check Answer AIlrights
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