Question: Net Present Value Method, Internal Rate of Retum Method, and Analysis The managernent of Advanced Alternative Power Inc. is considering two copital investment projects. The

Net Present Value Method, Internal Rate of Retum Method, and Analysis The managernent of Advanced Alternative Power Inc. is considering two copital investment projects. The estimated net cash flows from each project are as follows: Present Value of an Annuity of $1 at Compound Interest soreject. Required Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar. 16. Compute a present value index for each project. If required, round your answers to two decimat places. 2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuhy of $1 and (0) using the present value of an annuify of $1 in the table above. If required, round your present value factor answers to three decimal ptaces and internal rate of return to the nearest whole percent 3. The net present value, aresent value index, and internal rate of refurn all indicate that the is a better financiat opportunity cornpared to the , Although both imvestments meet the minimum feturn centerion of 10%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
