Question: Net Present Value A project has estimated annual net cash flows of $12,500 for five years and is estimated to cost $50,000. Assume a minimum
Net Present Value A project has estimated annual net cash flows of $12,500 for five years and is estimated to cost $50,000. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.352 2.991 4.917 4.355 4.111 3.784 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 9 6 .802 5.759 5.3284.772 4.031 107.360 6.145 5.6505.0194.192 Du WN Determine (1) the net present value of the project (if required, round to the nearest dollar) and (2) the present value Index (rounded to two decimal places). If required, use the minus sign to indicate a negative net present value. (1) Net present value of the project (2) Present value index Previous Next
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