Question: Please solve this question Net Present Value Method and Internal Rate of Return Method for a service company Keystone Healthcare Corp. is proposing to spend
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Net Present Value Method and Internal Rate of Return Method for a service company Keystone Healthcare Corp. is proposing to spend $92,664 on a five-year project that has estimated net cash flows of $22,000 for each of the 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 2.673 2.487 2.402 2.283 2.106 A 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Compute the net present value, using a rate of return of 10%. Use the table of present value of an annuity of $1 presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value. Present value of annual net cash flows Less amount to be invested Net present valueb. Based on the analysis prepared in part (a). is the rate of return (1) more than 10%, (2) 10%. or (a) less than 10%? v c. Determine the internal rate of return by computing a praent value factor for an annuity of $1 and using the table of the present value of an annuity of $1 presented above. [2%
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