Use the NPV method to determine whether McKnight Products should invest in the following projects: Project...

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Use the NPV method to determine whether McKnight Products should invest in the following projects: Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an annual return of 16% on investments of this nature Project B. Costs $380,000 and offers 10 annual net cash inflows of $74,000. McKnight Products demands an annual return of 14% 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 Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, XXXX Use parentheses or a minus sign for a negative net present value) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A Project A: Years 1-8 Present value of annuity 0 Investment Net present value of Project A Net Cash Inflow Annuity PV Factor Present (-16%, -8) Value K Use the NPV method to determine whether McKnight Products should invest in the following projects: . Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an ar Project B: Costs $380,000 and offers 10 annual net cash inflows of $74,000. McKnight Products demands an ann (Click the icon to view Present Value of $1 table.) Read the requirements. (Click the icon to view Present Value of Ordinary Annu Calculate the NPV of Project B. Project B: Years 1-10 Present value of annuity 0 Investment Net Cash Inflow Annuity PV Factor (i-14%, n=10) Present Value Net present value of Project B Requirement 2. What is the maximum acceptable price to pay for each project? Maximum Acceptable Price Use the NPV method to determine whether McKnight Products should invest in the following projects: Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an annual return of 16% on investm Project B: Costs $380,000 and offers 10 annual net cash inflows of $74,000 McKnight Products demands an annual retum of 14% on investmen (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. Project A Project B Maximum Acceptable Price Requirement 3. What is the profitability index of each project? (Round to two decimal places, XXX.) Select the formula, then enter the amounts to calculate the profitability index of each project Project A Project B Profitability Index Reference Periods 1% 2% 3% 4% 5% 6% 7% 8% Period 1 0.990 0.950 0.971 0.962 0.952 0.943 0.935 9% 10% 12% 14% 0.926 0.917 0,909 0.893 0.877 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 Period 7 Period 8 0.923 0.853 0.789 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.731 0.677 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.713 15% 16% 18% 20% 0.870 0.862 0.847 0.833 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.681 0.650 0.621 0,567 0.519 0.497 0.476 0.437 0.402 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194) 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Period 11 Period 12 0.896 0.804 0.887 0.788 Period 13 0.879 0.773 0.681 0.722 0.650 0.585 0.527 0.475 0.701 0.625 0.557 0.497 0.444 0.601 0.530 0.469 0.415 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135) 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 Perlod 16 0.853 0.728 0.623 0.534 0.458 0.394 Badlady O.ROK 0.339 in use 0274 0.217 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.020 0.10R De 0.100 0.002 onen Lanen eference Present Value of Ordinary Annulty of $1 Periods Period 1 1% 2% 3% 4% Period 2 Period 3 Period 4 0.990 0.980 0.971 1.970 1.942 2.941 2.884 Period 5 1.913 2.829 3.717 4.580 Period 6 Period 7 Period 10 Period 11 Period 12 Period 13 5% 6% 8% 7% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.775 2.723 2.673 2.624 2.577 2.531 2.487 3.902 3.808 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.889 3.784 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 5.938 5.453 5.234 10.368 9.787 9.253) 8.760 8.306 7.887 7.499 6.194 5.660 5.421 11.255 10.575 9.954 9.385 8.863 8.384 7.943 12.134 11.348 10.635 9.986 9.394 8.853 8.358 6.424 5.842 5.583 6.628 6.002 5.724 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 6.811 6.142 5.847 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 9% 10% 14% 15% 1.690 1.647 2.402 2.322 16% 18% 12% 0.893 0.877 0.870 0.862 1.626 1.605 2.283 2.246 2.174 2.106 20% 0.847 0.833 1.566 1.528 3.037 2.914 2.855 2.798 2.690 2.589 3.274 3.127 2.991 3.685 3.498 3.326 4.039 3.812 3.605 7.139 6.805 6.495 7.536 7.161 6.814 7.904 7.487 7.103 8.244 7.786 7.367 8.559 8.061 7.606 4.344 4.078 3.837 4.607 4.303 4.031 4.833 4.494 4.192 5.029 4.656 4.327 5.197 4.793 4.439 5.342 4.910 4.533) 5.468 5.008 4.611 5.575 5.092 4.675 Requirements 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. 2. What is the maximum acceptable price to pay for each project? 3. What is the profitability index of each project? Round to two decimal places. Use the NPV method to determine whether McKnight Products should invest in the following projects: Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an annual return of 16% on investments of this nature Project B. Costs $380,000 and offers 10 annual net cash inflows of $74,000. McKnight Products demands an annual return of 14% 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 Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, XXXX Use parentheses or a minus sign for a negative net present value) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A Project A: Years 1-8 Present value of annuity 0 Investment Net present value of Project A Net Cash Inflow Annuity PV Factor Present (-16%, -8) Value K Use the NPV method to determine whether McKnight Products should invest in the following projects: . Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an ar Project B: Costs $380,000 and offers 10 annual net cash inflows of $74,000. McKnight Products demands an ann (Click the icon to view Present Value of $1 table.) Read the requirements. (Click the icon to view Present Value of Ordinary Annu Calculate the NPV of Project B. Project B: Years 1-10 Present value of annuity 0 Investment Net Cash Inflow Annuity PV Factor (i-14%, n=10) Present Value Net present value of Project B Requirement 2. What is the maximum acceptable price to pay for each project? Maximum Acceptable Price Use the NPV method to determine whether McKnight Products should invest in the following projects: Project A: Costs $295,000 and offers eight annual net cash inflows of $56,000. McKnight Products requires an annual return of 16% on investm Project B: Costs $380,000 and offers 10 annual net cash inflows of $74,000 McKnight Products demands an annual retum of 14% on investmen (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. Project A Project B Maximum Acceptable Price Requirement 3. What is the profitability index of each project? (Round to two decimal places, XXX.) Select the formula, then enter the amounts to calculate the profitability index of each project Project A Project B Profitability Index Reference Periods 1% 2% 3% 4% 5% 6% 7% 8% Period 1 0.990 0.950 0.971 0.962 0.952 0.943 0.935 9% 10% 12% 14% 0.926 0.917 0,909 0.893 0.877 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 Period 7 Period 8 0.923 0.853 0.789 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.731 0.677 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.713 15% 16% 18% 20% 0.870 0.862 0.847 0.833 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.681 0.650 0.621 0,567 0.519 0.497 0.476 0.437 0.402 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194) 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Period 11 Period 12 0.896 0.804 0.887 0.788 Period 13 0.879 0.773 0.681 0.722 0.650 0.585 0.527 0.475 0.701 0.625 0.557 0.497 0.444 0.601 0.530 0.469 0.415 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135) 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 Perlod 16 0.853 0.728 0.623 0.534 0.458 0.394 Badlady O.ROK 0.339 in use 0274 0.217 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.020 0.10R De 0.100 0.002 onen Lanen eference Present Value of Ordinary Annulty of $1 Periods Period 1 1% 2% 3% 4% Period 2 Period 3 Period 4 0.990 0.980 0.971 1.970 1.942 2.941 2.884 Period 5 1.913 2.829 3.717 4.580 Period 6 Period 7 Period 10 Period 11 Period 12 Period 13 5% 6% 8% 7% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.775 2.723 2.673 2.624 2.577 2.531 2.487 3.902 3.808 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.889 3.784 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 5.938 5.453 5.234 10.368 9.787 9.253) 8.760 8.306 7.887 7.499 6.194 5.660 5.421 11.255 10.575 9.954 9.385 8.863 8.384 7.943 12.134 11.348 10.635 9.986 9.394 8.853 8.358 6.424 5.842 5.583 6.628 6.002 5.724 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 6.811 6.142 5.847 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 9% 10% 14% 15% 1.690 1.647 2.402 2.322 16% 18% 12% 0.893 0.877 0.870 0.862 1.626 1.605 2.283 2.246 2.174 2.106 20% 0.847 0.833 1.566 1.528 3.037 2.914 2.855 2.798 2.690 2.589 3.274 3.127 2.991 3.685 3.498 3.326 4.039 3.812 3.605 7.139 6.805 6.495 7.536 7.161 6.814 7.904 7.487 7.103 8.244 7.786 7.367 8.559 8.061 7.606 4.344 4.078 3.837 4.607 4.303 4.031 4.833 4.494 4.192 5.029 4.656 4.327 5.197 4.793 4.439 5.342 4.910 4.533) 5.468 5.008 4.611 5.575 5.092 4.675 Requirements 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. 2. What is the maximum acceptable price to pay for each project? 3. What is the profitability index of each project? Round to two decimal places.