. . Use the NPV method to determine whether Root Products should invest in the following projects Project A Costs $290,000 and offers seven annual net cash inflows of $54,000 Root Products requires an annual return of 12% on investments of this nature Project B Costs $380,000 and offers 9 annual net cash inflows of $74,000. Root 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 Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amount to three decimal places, XXXX. Use parentheses or a minus sign for a negative net prosent value.) Caclulate the NPV (not present value) of each project. Begin by calculating the NPV of Project A. Project A: Net Cash Annuity PV Factor (i=12%, na) Present value of annuity Investment Present Years Inflow Value 1-7 0 Enter any number in the edit fields and then click Check Answer Present Value of Si Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.9090.893 0.877 0.870 0.862 0.847 0.833 Period 2 10.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.7430.7180.694 Period 3 0.9710.942 | 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 Period 6 10.942 0.888 0.837 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 Period 7 10.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.5820.540 0.502 0.467 0.4040.351 0.327 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.6450.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.1370.112 Period 13 (0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.1600.141 0.125 0.099 0.078 Period 15 10.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 fee Period 16 0.853 0.7280.623 0.534 0.458 0.394 0.3390.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 Period 17 0.844 0.7140.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.093 0.080 | 0.060 0.045 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 | 0.060 0.043 0.031 Period 20 0.820 0.673 0.5540.456 0.377 0.312 0.258 0.215 0.178 0.149 0.1040.073 0.061 0.051 0.037 0.026 Period 21 0.811 0.660 0.538 0.439 0.359 0.2940.242 0.199 0.1640.135 0.093 0.064 0.053 0.044 0.031 0.022 Period 22 0.803 0.647 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 Period 23 0.795 0.634 0.5070.4060.3260.262 0.211 0.170 0.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 Period 24 0.788 0.622 0.492 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.066 0.043 0.035 0.028 0.0190.013 Period 25 10.780 0.610 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.059 0.038 0.030 0.024 0.0160.010 Period 26 0.772 0.598 0.464 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.0180.0110.007 Period 28 0.757 0.574 0.437 0.333 0.255 0.1960.150 0.116 0.090 0.069 0.042 0.026 0.0200.0160.010 0.006 Period 29 0.749 0.563 0.424 0.321 0.243 0.185 0.1410.107 0.082 0.063 0.037 0.022 0.017 0.014 0.008 0.005 Period 30 (0.742 0.5520.412 0.308 0.231 0.174 131 0.099 0.075 0,057 0.033 0.020 0,015 0,012 0.007 0.004 Period 400.672 0,453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.01 0.005 0.0040.003 0.001 0.001 Period 50 0.608 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.003 0.001 0.001 0.001 9% Present Value of Ordinary Annuity of S1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.8591.833 1.8081.783 1.759 1.736 1.6901.647 1.626 1605 1.566 1.528 Period 3 2.9412.884 2.829 2.775 2.723 2.6732.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.1703.037 2.914 2.855 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3,791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.0764.917 4.767 4.623 4.4864.355 4.111 3.889 3.784 3.685 3.498 3.326 Period 7 6.728 6,4726.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.1604.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 | 6.210 5.971 3.7475.5355.335 4.9684.6394.4874.344 4.0783.837 Period 9 8.5668.1627.786 7.435 7.1086,802 6.515 6.247 5.9955.759 5.328 | 4.9464.7724.607 4.303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 7.0246.710 6.418 6.145 5.6505.216 5.0194.833 4.494 4.192 Period 11 10.368 9.7879.253 8.760 8.3067.887 7.499 7.139 6.8056,495 5.9385.453 5.2345.029 4.656 4.327 Period 12 11.255 10.575 9.9549.385 8.863 8.384 7.9437.536 7.1616.814 6.1945.660 5.421 5.1974.793 4.439 Period 13 12.134 11.348 10.635 9.9869.3948.853 8.3587.904 7.4 7.103 6.424 5.842 3.583 5.3424.910 4.533 Period 14 13.00412.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 | 6.6286.002 5.7245.4685.0084611 Period 15 13.865 12.849|11.93811.11810.3809.712 9.108 8.559 8,061 7.606 6.811 6.142 5.8475.575 5.092 4.675 Print Done Period 16 14.718 13.578 12.561 11.652 10.838/10.106 9.447 8.851 8.313 7.8246.9746.265 5.9545.669 5.162 4.730 Period 17 15.562 14.292 13.166 12.166|11.274 10.4771 9.763 9.122 8.544 8.022 7.1206.373 6.047 5.749 5.222 4.775 Period 18 16.398|14.992 13.754 12.65911.690 10.828 10.0599.3728.756 8.2017.250 6.4676.128 5.818 5.2734.812 Period 19 17.226 15.678|14.324 13.134|12.085|11.15810.336 9.604 8.950 8.365 7.3666.5506.198 5.877 5.316 4.844 Period 20 18.046 16.35114.877 13.590 12.462|11.470 10.5949.818 9.129 8.5147.469 6.623 6.259 5.9295.353 4.870 Period 21 18.857 17.011|15.415 14.02912.821|11.764 10.836 10.017 9.2928.6497.562 6.6876.3125.9735.384 4.891 Period 22 19.660 17.65815.93714.451 13.163|12.042 11.061|10.2019,442 8.7727.645 6.743 6.3596.0115.410 4,909 Period 23 20.456 18.292 16,444 14.857 13.48912.303 11.272 10.371 9.5808.8837.718 6.792 6.3996.044 5.432 4.925 Period 24 21.24318.914 16.936 15.247|13.799 12.550 11.46910.529 9.707 8.9857.784 6.835 6.4346.0735.451 4.937 Period 25 22.023 19.523 17.413 15.62214.094 12.783 11.654 10.675 9.8239.077 7.8436.873 6,464 6.097 5.467 4.948 Period 26 22.795 20.121 17.877 15.983 14.375 13.003 11.826 10.81019.929 9.1617.896 6.906 6.491 6.118 5.480 4.956 Period 27 23.560 20.707 18.327 16.33014.643 13.211|11.987 10.93510.027 9.237 7.943 6.935 6.514 6.136 5.492 4.964 Period 28 24.316 21.281 18.764 16.663 14.898|13.406 12.137 11.051 10.116 9.3077.984 6.9616.534 6.1525.5024.970 Period 29 25.066 21.844 19.188 16.984 15.141|13.591 12.278 11.158 10.1989.370 8.022 6.983 6.551 6.166 5.510 4.975 Period 30 25.808 22.396 19.600 17.292|15.372 13.765 12.409 11.258 10.274 9.4278.0557.0036.566 6.1775.517 4.979 Period 40 32.835 27.355|23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.7798.244 7.105 6.642 6.233 5.548 4.997 Period 50 39.196 31.424 25.730 21.48218.25615,762 13.801 12.233 10.962 9.915 8.304 7.133 6,661 6,2465.5544.999 Print Done X 1 i Requirements ter any ne NPV o ce parenti -sent valu 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. of annuity Print Done edit fields and then click Check Answer. Use the NPV method to determine whether Root Products should invest in the following projects: Project A Costs $290,000 and offers seven annual net cash inflows of $54,000. Root Products requires an annual return of 12% on investments of this nature Project 8: Costs $380,000 and offers 9 annual net cash inflows of $74,000. Root 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 Prosent Value of Ordinary Annuity of $1 tabla.) Read the requiremonts Requirement . Is NPV Orech project Assume nerver projects are avai. KONG w wo ucima proces. (ener any actor amounts ou decimal places, XXXX. Use parentheses or a minus sign for a negative not present value.) Caciulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Net Cash Annuity PV Factor Years Inflow (i=12%, n=7) Value Present value of annuity 0 Investment Net present value of Project A Present 1-7 Enter any number in the edit fields and then click Check