Net Present Value Method and Internal Rate of Return Method Wisconsin Healthcare Corp. is proposing to spend $61,285 on a project that has estimated net cash flows of $17,000 for each of the next five years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.8371 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.1921 a. Compute the net present value, using a rate of return of 15%. Use the table of present values of an annuity of $1 presented above. If required, use the minus sign to indicate a negative net present value. Present value of annual net cash flows Amount to be invested Net present value 61,285 X 57,001 X -4,284 X 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%? more than 15% x c. Determine the internal rate of return by computing a present value factor for an annuity of $1 and using the table of the present value of an annuity of $1 presented above. In your calculation, round the net present value factor to three decimal places. % Feedback Check My Work a. Multiply the annual net cash flows by the present value of an annuity factor for five periods at 15%. Subtract the cost from the present value of annual net cash flows. b. Recall what a negative net present value indicates. c. Divide the amount to be invested by the annual net cash flow. In the table, find the rate of return closest to the present value factor determined