A project has estimated annual net cash flows of $70,000 for four years and is estimated to cost $190,000. Assume a minimum acceptable rate of return of 10%. Using Exhibit 5, determine
(a) The net present value of the project and
(b) The present value index, rounded to two decimal places?
Exhibit 5: Present Value of $1 at Compound Interest

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Periods 4% 5% 5 % 13% 0.96154 0956940 095238 094787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 0.88496 0.92456 0915730 0.90703 0.89845 0.89000 0.88166 0.87344 0.82645 0.81 162 0.79719 0.78315 1% 1 0% 11% 12% 3 0.88900 0876300 0.86384 085161 0.83962 0.82785 0.81630 0.75131 0.73119 0.71178 0.69305 0.85480 0838560 0.82270 080722 0.79209 0.77732 0.76290 068301 0.65873 0.63552 0.61332 5 0.82193 0.802450 0.78353 0.76513 0.74726 0.72988 0.71299 062092 0.59345 0.56743 0.54276 6 0.79031 0.767900 0.74622 0.72525 0.70496 0.68533 0.66634 056447 0.53464 0.50663 0.48032 7 0.75992 0.734830 0.71068 068744 0.66506 0.64351 0.62275 051316 048166 0.45235 0.42506 8 0.73069 0.703190 0.67684 065160 0.62741 0.60423 0.58201 046651 0.43393 0.40388 0.37616 9 0.70259 0672900 0.64461 061763 0.59190 0.56735 0.54393 042410 0.39092 0.36061 0.33288 0.67556 0643930 0.61391 058543 0.55839 0.53273 0.50835 038554 0.35218 0.32197 0.29459 05583 056735058201 051316 053464 0385s4 039092 s002 0.7625078270 0543930 064461 055160 066505 068533 071209 0580