Petrioli Services is considering a project with these data projections. Using the time value of money principle and the net present value method, answer the following questions. The present value of annuity of $1 table is also provided. Projections Initial investment $6,000,000 Project Life 6 years Salvage value Annual Revenue and cost Data Projected sales $4,000,000 Cash operating expenses 1,680,000 Depreciation expense 1,000,000 Net operating income $1,400,000 Annual net cash tow $2,400,000 $ Lesst Periods 1 2 3 5 6 7 8 9 10 11 les 0.9091 1.7355 2.4869 3.1699 3.7988 4.3553 4.8684 5.3349 5.7590 6.1446 8.5136 Present Value of Annuity of $1 11512N 135 145 0.9009 0.8929 0.8850 0.8772 1.7125 1.6901 1.668 1.6467 2.4437 2.4018 2.3612 2.3216 3.1024 3.0373 2.9745 2.9137 3.6959 3.6848 3.5172 3.4331 4.2305 4.1114 3.9975 3.8887 4.7122 4.5638 4.4226 4.2883 5.1461 4.9676 4.7988 4.6389 5.5370 5.3282 5.1317 4.9464 5.8892 5.6582 5.4262 5.2161 7.9633 7.4694 7.0248 6.6231 155 0.8696 1.6257 2.2832 2.8550 3.3522 3.7845 4.1604 4.4873 4.7716 5.0188 6.2593 Knowledge Check 02 If Petriolis cost of capital is 12%, what is the project's net present value? $3,867,360 $4,153,200 8 9 10 11 4.8684 5.3349 5.7590 6.1446 8.5136 4.7122 5.1461 5.5370 5.8892 7.9633 4.5638 4.9676 5.3282 5.6502 7.4694 4.4226 4.7988 5.1317 5.4262 7.0248 4.2883 4.6389 4.9464 5.2161 6.6231 4.1604 4.4873 4.7716 5.0188 6.2593 Knowledge Check 02 If Petrioli's cost of capital is 12%, what is the project's net present value? $3,867,360 $4,153,200 $10,153,200 $9,867,360 Knowledge Check 03 If Petrioli's cost of capital increases to 16%, what happens to the net present value? No change Increases Decreases