Question: #15 Use the NPV method to determine whether Root Products should invest in the following projects: - Project A: Costs $260,000 and offers eight annual

#15 #15 Use the NPV method to determine whether Root Products should invest in the following projects: - Project A: Costs $260,000 and offers eight annual net cash inflows of $56,000. Root Products requires an annual return of 16% on investments of this nature. - Project B : Costs $380,000 and offers 10 annual net cash inflows of $73,000. Root Products

Use the NPV method to determine whether Root Products should invest in the following projects: - Project A: Costs $260,000 and offers eight annual net cash inflows of $56,000. Root Products requires an annual return of 16% on investments of this nature. - Project B : Costs $380,000 and offers 10 annual net cash inflows of $73,000. Root Products derrands an annual raturn of 14% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Requirement 2. What is the maximum acceptable price to pay for each project? Use the NPV method to deterrrine whether Root Products should irvest in the following projects: - Project A : Costs $260,000 and offers eight annual net cash infows of $56,000. Root Products requires an annual return of 16% on investments of this nature. - Projoct B: Costs $360,000 and offers 10 annual net cash inflows of $73,000. Root Products demands an annual return of 14% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirerrients. Laiculate the Nr'v or rroyect . Requirement 2. What is the maximum acceptable price to pay for each project? Use the NPV method to deterrrine whether Root Products should invest in the following projects: - Praject A : Costs $260,000 and offers eight annual net cash inflows of $56,000. Root Products requires an annual return of 16% on investments of this nature. - Project B: Costs $380,000 and offers 10 annual net cash inflows of $73,000. Root Products demands an annual return of 14% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Lalculate the NrV ot rrovect . Draennt Molia nf E Present Value of Ordinary Annuity of $1 \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 15% & 16% & 18% & 20% \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.935 & 0.926 & 0.917 & 0.909 & 0.893 & 0.877 & 0.870 & 0.862 & 0.847 & 0.833 \\ Period 2 & 1.970 & 1.942 & 1.913 & 1.886 & 1.859 & 1.833 & 1.808 & 1.783 & 1.759 & 1.736 & 1.690 & 1.647 & 1.626 & 1.605 & 1.566 & 1.528 & \\ Period 3 & 2.941 & 2.884 & 2.829 & 2.775 & 2.723 & 2.673 & 2.624 & 2.577 & 2.531 & 2.487 & 2.402 & 2.322 & 2.283 & 2.246 & 2.174 & 2.106 & \\ Period 4 & 3.902 & 3.808 & 3.717 & 3.630 & 3.546 & 3.465 & 3.387 & 3.312 & 3.240 & 3.170 & 3.037 & 2.914 & 2.855 & 2.798 & 2.690 & 2.589 & \\ Period 5 & 4.853 & 4.713 & 4.580 & 4.452 & 4.329 & 4.212 & 4.100 & 3.993 & 3.890 & 3.791 & 3.605 & 3.433 & 3.352 & 3.274 & 3.127 & 2.991 & \\ Period 6 & 5.795 & 5.601 & 5.417 & 5.242 & 5.076 & 4.917 & 4.767 & 4.623 & 4.486 & 4.355 & 4.111 & 3.889 & 3.784 & 3.685 & 3.498 & 3.326 & \\ Period 7 & 6.728 & 6.472 & 6.230 & 6.002 & 5.786 & 5.582 & 5.389 & 5.206 & 5.033 & 4.868 & 4.564 & 4.288 & 4.160 & 4.039 & 3.812 & 3.605 & \\ Period 8 & 7.652 & 7.325 & 7.020 & 6.733 & 6.463 & 6.210 & 5.971 & 5.747 & 5.535 & 5.335 & 4.968 & 4.639 & 4.487 & 4.344 & 4.078 & 3.837 & \\ Period 9 & 8.566 & 8.162 & 7.786 & 7.435 & 7.108 & 6.802 & 6.515 & 6.247 & 5.995 & 5.759 & 5.328 & 4.946 & 4.772 & 4.607 & 4.303 & 4.031 & \\ Period 10 & 9.471 & 8.983 & 8.530 & 8.111 & 7.722 & 7.360 & 7.024 & 6.710 & 6.418 & 6.145 & 5.650 & 5.216 & 5.019 & 4.833 & 4.494 & 4.192 & \\ Period 11 & 10.368 & 9.787 & 9.253 & 8.760 & 8.306 & 7.887 & 7.499 & 7.139 & 6.805 & 6.495 & 5.938 & 5.453 & 5.234 & 5.029 & 4.656 & 4.327 & \\ Period 12 & 11.255 & 10.575 & 9.954 & 9.385 & 8.863 & 8.384 & 7.943 & 7.536 & 7.161 & 6.814 & 6.194 & 5.660 & 5.421 & 5.197 & 4.793 & 4.439 & \\ Period 13 & 12.134 & 11.348 & 10.635 \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Use the NPV method to determine whether McKnight Products should invest in the following projects: Project A : Costs $290,000 and offers eight annual net cash inflows of $57,000. McKnight Products...

Use the NPV method to determine whether Juda Products should invest in the following projects:Project A: Costs $290,000 and offers seven annual net cash inflows of $57,000. Juda Products requires an...

please answer fully and completely for a guaranteed thumbs up. please do it in a timely manner as well! let me know if more info is needed 2% 16% 1.000 18% 1.000 20% 1.000 2 160 2.180 2.200 3.506...

Use the NPV method to determine whether Root Products should invest in the following projects: Project A: Costs $275,000 and offers seven annual net cash inflows of $52,000. Rouse products require an...

can you please answer for project A and B HW Score: 89%, 8.9 of 10 p Question Help c Score: 0.5 of 1 pt 6 of 10 (10 complete E12-27A (similar to) Use the NPV method to determine whether with Products...

please also answer: refer to original number. Suppose project A has a residual valur of $20,000 at the end of the year. Suppose project b has a residual value of $10,000 at the end of the 10th year...

A small water pump is used in an irrigation system. The pump takes water in from a river at 10oC, 100 kPa at a rate of 4.5 kg/s. The exit line enters a pipe that goes up to an elevation 18 m above...

A non-relativistic proton beam passes without deviation through the region of space where there are uniform transverse mutually perpendicular electric and magnetic fields with E = 120 kV/m and B = 50...

Over the long run, stocks have provided investors with annual returns of around Question 1 1 options: 3 % to 5 % . 1 5 % to 2 0 % . 0 % to 2 % . 1 0 % to 1 2 % .

a=2 b= 0 c= 2 d=0 e=0 f=9 g=3 5. Draw the Network diagram for the following project. Estimate the Earliest start time and Latest finish time for each activity. If every day it cost 200 rials for this...