Present Value of Annuity of $1Periods1%2%3%4%5%6%8%10%12%14%16%18%20%Period 1Period 2Period 3Period 4Period 50.980 0.971 0.962 0952 0.943 0.926 0.909 0.8931.942 1.913 1.886 1859 1.833 1.783 1.736 1.6902.884 2.829 2.775 2.723 2.673 2.577 2.487 2.4023.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.9144.713 4.580 4.4520.9900.8770.8620.8470.8331.9701.6471.6051.5661.5282.9412.3222.2462.1742.1063.9022.7982.6902.5894.8534.329 4212 3.993 3.791 3.6053.4333.2743.1272.991Period 6Period 7Period 8Period 9Period 10 9.4715.7955.601 5.417 5.2425.076 4.917 4.623 4.355 4.1116.472 6.230 6.002 5.786 5.582 5.206 4.868 4.5646.210 5.747 5.335 4.9686.247 5.759 5.3287722 7.360 6.710 6.145 5.6503.8893.6853.4983.3266.7284.2884.0393.8123.6057.652 7.325 7.020 6.733 6.4638.162 7786 7 4358.983 8.530 8.1114.6394.3444.0783.8378.5667.108 6.8024.9464.6074.3034.0315.2164.8334.4944.192Period 11 10.368 9.787 9.253 8.760Period 12 11.255 10.575 9.954 9.385Period 13 12.134 11.348 10.635 9.986 9.394Period 14 13.004 12.106 11.296 10.563 9.899Period 15 13.865 12.849 11.938 11.118 10.380 9.7128.306 7 887 7.139 6.495 59387536 6.814 6.1947 904 7 103 6 4248.244 7.367 6.6288.559 7.606 6.8115.4535.0294.6564.3278.8638.3848.8535.6605.1974.7934.4395.8425.3424.9104.5339.2956.0025.4685.0084.6116.1425.5755.0924.675Period 20 18.046 16.351 14.877 13.590 12.462 11 470 9.818 8.514Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077| 7.843Period 30 25.808 22.396 19.600 17 292 15.372 13.765 11.258 9.427 8.055Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.2447.4696.6235 9295.3534.8706.8736.0975.4674.9487.0036.1775.5174.9797.1056.2335.5484.997PrintDone E12-29A (similar to)Question HelpUse 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 returnof 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 of14% 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.)RequirementWhat 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 fornegative net present values.)leThe NPV of Project A is5)5)n: ManeserveEnter any number in the edit fields and then click Check Answer.3 partsremainingClear AllCheck AnswerAIlrights

Project A, PV of cash inflows=Cash inflows×PV factor=$59,000×4.564=$269,276

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)

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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You are evaluating a project that costs $75,000 today. The project has an inflow of $160,000 in one year and an outflow of $65,000 in two years. What are the IRRs for the project? What discount rate results in the maximum NPV for this project?
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