Question: Use the NPV method to determine whether Preston Products should invest in the following projects: - Project A: Costs $290 , 000 and offers seven
Use the NPV method to determine whether Preston Products should invest in the following projects: - Project A: Costs $290 , 000 and offers seven annual net cash inflows of $56 , 000 . Preston Products requires an annual return of 12% on investments of this nature. - Project B: Costs $385 , 000 and offers 10 annual net cash inflows of $73 , 000 . Preston Products demands an annual return of 10% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. for a negative net present value.) Caclulate the NPV (net present value) of each project Begin by calculating the NPV of Project A Requirement 2. What is the maximum acceptable price to pay for each project? Requirement 3. What is the profitability index of each project? (Round to two decimal places, X.XX.) Select the formula, then enter the amounts to calculate the profitability index of each project
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