Exercise 11-14 Computing and interpreting net present value and internal rate of return LO P3, P4 Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $228,000 and would yield the following annual cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 C1 $ 12,000 108,000 168,000 $288,000 C2 $ 96,000 96,000 96,000 $288,000 C3 $180,000 60,000 48,000 $288,000 Totals 1. Assume that the company requires a 12% return from its investments. Using net present value, determine which projects, if any, should be acquired. 2. Using the answer from part 1, is the internal rate of return higher or lower than 12% for Project C2? Project C1 Initial Investment Chart Values are Based on: i = % Year Cash Inflow x PV Factor Present Value 1 = 2 3 II Project C2 Initial Investment Year Cash Inflow x PV Factor II Present Value 1 = 2 = 3 = Project C3 Initial Investment Year Cash Inflow X PV Factor II Present Value 1 = 2 = 3 =