Net present value method, internal rate of return method, and analyis for a service company

The management of Advanced Atemative Power Inc. is consldering two capital inveltment projects. The elimated net cash flows from each project are as follows

Required:

$1$a$.$ Compute the net prevent value for each project. Use a rate of $6s,$ and the present value of an annuty of $81$ in the table above. If required, round to the nearest dollar.

$1$b$.$ Compute a present value index, for each project. If required, round your answers to two decimal places.

Present Value Index

Wind Turtines

Biohud Equipment

Wind Turbines Biofuel Equipment

Present value factor for an annuity of $31$

Internal rake of retum.

The net present value, presert value index, and internal rate of retum all indicate that the

is$/$are a better financial opportunity compared to the

$,$ although boch investments meet the minimum return cilterion of $6N.$

Tomat Wr whe

Consider why he internal rate di retum helps in earparing projects.