Use the NPV method to determine whether Smith Products should invest in the following projects: Project A: Costs $265,000 and offers seven annual net cash inflows of $52,000. Smith Products requires an annual return of 16% on investments of this nature. Project B: Costs $385,000 and offers 10 annual net cash inflows of $76,000. Smith 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, x.xxx. 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. Net Annuity PV Project A: Cash Factor Present Years Inflow (i=16%, n=7) Value 1-7 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project Net Annuity PV Project B. Cash Factor Present Years Inflow (14%, n=10) Value 1 - 10 Present value of annuity a Investment Net present value of Project B Requirement 2. What is the maximum acceptable price to pay for each project? Maximum Acceptable Price Project A Project B 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 Profitability Index Project A Project B 1 1 3 4 9 Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 10.990|0.9800.9710.962 0.9520.943|0.935|0.926|0.917|0.909|0.8930.8770.870 0.862 0.847 0.833 2 10.9800.961 0.9430.925 0.907 0.8900.8730.8570.8420.82610.797 10.769 0.756 0.743 10.7180.694 3 10.9710.9420.915 0.889 0.8640.840 0.816|0.7940.772|0.751 0.712 0.675 0.658 0.641 0.6090.579 4 0.961 0.9240.8880.8550.8230.792 0.7630.7350.7080.6830.636 0.592 0.572 0.552 0.516 0.482 5 10.9510.9060.8630.8220.784|0.7470.713|0.6810.650|0.621 0.5670.5190.497 0.4760.4370.402 6 10.9420.8880.8370.790|0.746 0.7050.6660.63010.596|0.5640.5070.456 0.43210.4100.370 0.335 7 0.9330.871 0.8130.760 0.711 0.6650.623|0.5830.5470.5130.452 0.400 0.376 0.3540.3140.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.5820.540 0.50210.467 0.4040.351 0.327 0.305 0.266 0.233 9 10.9140.8370.7660.7030.6450.5920.5440.500|0.460|0.424|0.3610.308 0.284 0.263 0.2250.194 10 10.9050.8200.7440.6760.6140.558|0.508|0.463|0.4220.386|0.322 0.270 0.247 0.227 0.191 0.162 11 10.8960.8040.7220.650|0.5850.5270.4750.4290.3880.350|0.2870.237 0.2150.1950.162 0.135 12 0.8870.7880.701 0.6250.5570.4970.4440.397|0.3560.3190.257 0.208 0.187 0.168 0.1370.112 13 0.879|0.7730.6810.6010.530|0.4690.4150.368|0.3260.290|0.229 0.182 0.163 0.145 0.116 0.093 14 0.870|0.7580.661|0.577|0.5050.4420.3880.3400.299|0.263|0.2050.1600.141 0.125 0.099 0.078 15 0.861 0.7430.6420.5550.4810.417|0.362|0.3150.2750.239|0.1830.1400.1230.108 0.0840.065 16 0.853|0.728|0.623|0.534|0.458|0.394|0.339|0.292|0.252|0.218|0.163|0.123 0.107 0.093 0.071 0.054 17 0.8440.7140.6050.5130.4360.3710.317|0.270|0.231|0.1980.1460.108 0.093 0.080 0.060 0.045 18 0.8360.700|0.587 0.4940.4160.350|0.296 |0.250|0.2120.180|0.130|0.095 0.081 0.0690.051 0.038 19 0.828|0.686|0.570|0.475|0.3960.331|0.277|0.232|0.194|0.1640.116 0.083 0.07010.060 0.043 0.031 20 0.820|0.6730.5540.4560.37710.312|0.258|0.215|0.178|0.149|0.104 0.0730.061 0.051 0.037 0.026 21 10.811 0.6600.538|0.439|0.359|0.2940.242 0.1990.1640.135 0.0930.064 0.0530.044 0.031 0.022 22 0.8030.6470.5220.4220.3420.2780.2260.1840.1500.1230.0830.056 0.046 0.038 0.026 0.018 23 0.7950.6340.507 0.4060.3260.262 0.211 0.1700.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 24 10.7880.622|0.4920.390 0.310|0.247 0.1970.1580.1260.1020.066|0.043 0.035 0.028 0.0190.013 25 10.780|0.6100.478|0.375 0.2950.233|0.184|0.146 0.116 0.0920.059 0.038 0.030 0.0240.0160.010 26 10.772|0.598|0.464|0.361|0.281|0.220|0.172|0.135|0.106|0.084|0.0530.033 0.026 0.021 0.014 0.009 27 10.7640.5860.450|0.347|0.268|0.207|0.161 0.125 0.098|0.0760.047 0.0290.0230.0180.0110.007 28 0.757 0.574|0.437|0.333|0.255.0.1960.1500.1160.090 0.069|0.0420.026 0.0200.0160.0100.006 29 10.7490.5630.424|0.321 0.2430.1850.1410.1070.0820.0630.037 0.022 0.017 10.014 0.008 0.005 30 0.7420.5520.412 0.3080.2310.1740.1310.099|0.0750.057|0.033|0.0200.015 0.0120.007 0.004 40 0.6720.4530.307 0.2080.1420.097 0.067 0.0460.032 0.022 0.011 0.005 0.0040.003 0.001 0.001 50 0.608|0.372|0.228|0.1410.087|0.054 0.034|0.021 0.0130.0090.003 0.001 0.001 0.001 Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.9090.893.8770.870.862.8470.833 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.6901.647 1.626 1.6051.566 1.528 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.4872.402 2.3222.2832.246 2.174 2.10 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.1703.0372.9142.8552.7982.6902.589 5 4.853 4.7134.580 4.452 4.329 4.212 4.100 3.993 3.890 3.7913.6053.4333.3523.2743.1272.99 5.795 5.601 5.417 5.242 5.0764.917 4.767 4.623 4.486 4.355 4.111 3.8893.7843.6853.498 3.32 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.8684.5644.2884.1604.039 3.812 3.605 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.3354.9684.6394.487 4.3444.0783.837 8.566 8.1627.786 7.435 7.108 6.802 6.515 6.247 5.995 5.7595.328 4.946 4.7724.6074.3034.03 10 9.471 8.983 8.530 8.111 7.722 7.360 7.0246.710 6.418 6.1455.6505.216|5.0194.8334.4944.19 11 10.368 9.7879.2538.760 8.3067.887 7.499 7.139 6.805 16.4955.938|5.4535.2345.0294.656 4.327 12 11.255 10.575 9.954 9.3858.863 8.384 7.943 7.536 7.161 16.8146.1945.6605.42115.1974.7934.439 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.1036.4245.8425.5835.3424.9104.53 14 13.004/12.10611.29610.563 9.899 9.295 8.745 8.244 7.786 7.3676.6286.00215.7245.4685.0084.611 15 13.86512.849 11.938|11.11810.380 9.712 9.108 8.559 8.061 7.6066.8116.1425.8475.5755.0924.674 16 14.718 13.578 12.561 11.652 10.838/10.106 9.447 8.851 8.313 7.8246.9746.2655.9545.6695.1624.730 17 15.562 14.292 13.16612.166 11.274 10.4779.763 9.122 8.544 8.022 7.1206.37316.0475.7495.2224.774 18 16.398 14.99213.75412.65911.69010.828 10.059 9.372 8.756 8.2017.250 6.4676.1285.8185.2734.812 19 17.22615.678/14.32413.13412.085 11.158/10.336 9.604 8.950 8.3657.3666.5506.1985.8775.3164.844 20 18.046 16.351 14.87713.590 12.462 11.470 10.594 9.818 9.129 8.5147.4696.6236.2595.9295.3534.870 21 18.857 17.01115.415 14.029 12.821 11.764 10.83610.017 9.292 8.6497.5626.6876.3125.97315.384 14.89 22 19.660 17.658 15.937 14.451 13.16312.042 11.06110.201 9.442 8.7727.6456.74316.3596.0115.4104.90$ 23 20.45618.292 16.44414.85713.48912.303 11.272 10.371 9.580 8.8837.7186.7926.3996.0445.432 4.92 24 21.24318.91416.93615.24713.79912.550 11.469 10.529 9.707 8.9857.7846.8356.4346.0735.4514.937 25 22.023 19.52317.41315.622 14.094 12.783|11.654 10.675 9.8239.077 7.8436.8736.4646.09715.467 4.948 26 .79520.12117.87715.983 14.37513.003 11.826 10.810 9.929 9.161 7.8966.9066.4916.1185.480 4.95 27 23.560 20.70718.32716.330 14.64313.211 11.987 10.935 10.0279.237 7.9436.9356.5146.1365.4924.964 28 24.31621.28118.76416.66314.89813.406 12.137 11.051 10.1169.3077.9846.9616.5346.1525.5024.970 29 25.06621.84419.188/16.984|15.14113.591 12.278 11.158/10.1989.3708.0226.9836.5516.166|5.5104.97 30 25.80822.39619.600 17.292 15.372 13.765 12.409/11.25810.2749.4278.0557.00316.56616.1776.5174.979 40 32.83527.355 23.115 19.793 17.159 15.046 13.332 11.925 10.7579.7798.244 7.1056.6426.2335.5484.997 50 39.196 31.42425.730 21.482 18.25615.76213.80112.233 10.9629.915|8.304 7.1336.6616.2465.5544.99