4) Instructions

required

Ne' pre cent value method, internal rate of retum tmethod, and analysis for a gervipe company The management of Advanced Alternative Power Incu, is considering twe dap ta f investment projects. The estimated ne cash flovs from each project are as follows: The wind turbines require an investment of $887,600, while the biofuel equipment requires an investment of $911,100. No residual value is expected from either project. 1a. Compute the net present value for each project. Use a rate of 6% and the present value of an annuity of $1 in the table above. If required, round to the nearest dollar. 1b. Compute a present yalue index for each project. If required, round your answers to two decimal places. 2. Determine the internal rate of return for each project by (a) computing a presant yalue factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. 3. The net present value, present value index, and internal rate of return all indicate that the is/are a better financial opportunity compared to the - although both investments meet the minimum return criterion of 6%