Hawkeye Healthcare Corp. is proposing to spend $134,136 on an eight-year project that has estimated net cash flows of $27,000 for each of the eight years.
a. Compute the net present value, using a rate of return of 15%. Use the present value of an annuity of $1 table in the chapter (Exhibit 2).
b.  Based on the analysis prepared in part (a), is the rate of return (1) more than 15%, (2) 15%, or (3) less than 15%? Explain.
c. Determine the internal rate of return by computing a present value factor for an annuity of $1 and using the present value of an annuity of $1 table presented in the text (Exhibit 2).

Exhibit 2:

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Present Value of an Annuity of $1 at Compound Interest 6% Year 10% 12% 15% 20% 0.870 0.943 0.909 0.893 0.833 1.736 1.690 1.626 1.833 1.528 2.283 3 2.673 2.487 2.402 2.106 3.170 4 3.465 3.037 2.855 2.589 3.605 2.991 4.212 3.791 3.353 3.785 4.917 4.355 4.111 3.326 5.582 4.868 4.564 4.160 3.605 5.335 8. 6.210 4.968 4.487 3.837 9. 6.802 5.759 5.328 4.772 4.031 6.145 10 7.360 5.650 5.019 4.192