Part Five APPLY THE CONCEPTS: Net present value and Present value index McCall Manufacturing is looking to invest in Project A or Project B. The data surrounding each project is provided below. McCall's cost of capital is 10% Project A Project B This project requires an initial investment ofThis project requires an initial investment of $172,500. The project will have a life of 3 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000 $137,500. The project will have a life of 5 years. Annual revenues associated with the project will be $111,000 and expenses associated with the project will be $60,000 Calculate the net present value and the present value index for each project using the present value tables provided below. Present Value of $1 (a single sum) at Compound Interest. Present Value of an Annuity of $1 at Compound Interest. Note: . Use a minus sign to indicate a negative NPV . If an amount is zero, enter "O". Enter the present value index to 2 decimals. ProjectA 545,965 X 165,000 X 380,965 X Project B 286,330X 137,500 148,830X Total present value of net cash flow Amount to be invested Net present value Present value index: Project A 545,965 X Project B 286,330 X Based upon net present value, which project has the more favorable profit prospects? Project AV Based upon the present value index, which project is ranked higher? Can't determine X Part Five APPLY THE CONCEPTS: Net present value and Present value index McCall Manufacturing is looking to invest in Project A or Project B. The data surrounding each project is provided below. McCall's cost of capital is 10% Project A Project B This project requires an initial investment ofThis project requires an initial investment of $172,500. The project will have a life of 3 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000 $137,500. The project will have a life of 5 years. Annual revenues associated with the project will be $111,000 and expenses associated with the project will be $60,000 Calculate the net present value and the present value index for each project using the present value tables provided below. Present Value of $1 (a single sum) at Compound Interest. Present Value of an Annuity of $1 at Compound Interest. Note: . Use a minus sign to indicate a negative NPV . If an amount is zero, enter "O". Enter the present value index to 2 decimals. ProjectA 545,965 X 165,000 X 380,965 X Project B 286,330X 137,500 148,830X Total present value of net cash flow Amount to be invested Net present value Present value index: Project A 545,965 X Project B 286,330 X Based upon net present value, which project has the more favorable profit prospects? Project AV Based upon the present value index, which project is ranked higher? Can't determine X