Year A 0 1 0 2 0 Two mutually exclusive investment projects have the following forecasted cash flows: B -$22,000 -$22,000 +12,000 +12,000 3 +12,000 0 +12,000 +60,000 Use Table II and Table IV to answer the questions. a. Compute the internal rate of return for each project. Round your answers to one decimal place. IRRA % 4 % IRRE: b. Compute the net present value for each project if the firm has a 12 percent cost of capital. Round your answers to the nearest dollar. NPVA: $ NPVB: $ c. Which project should be adopted? Why? -Select- should be chosen because it has the higher -Select- -Select- ). It is assumed that the firm's reinvestment opportunities are more accurately represented by the TABLE II Present Value Interest Factor (PVIF) ($1 at i % per period for n periods): PVIF :: PV, - FV.PVIF..) (1 + i)" 1 Period n 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 24 25 30 40 50 60 1% 1.000 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.788 0.780 0.742 0.672 0.608 0.550 7% 1.000 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.276 0.258 0.197 0.184 0.131 0.067 0.034 0.017 1.000 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.053 0.047 0.026 0.008 0.002 0.001 2% 3% 4% 5% 6% 1.000 1.000 1.000 1.000 1.000 0.980 0.971 0.962 0.952 0.943 0.961 0.943 0.925 0.907 0.890 0.942 0.915 0.889 0.864 0.840 0.924 0.899 0.855 0.823 0.792 0.906 0.863 0.822 0.784 0.747 0.888 0.838 0.790 0.746 0.705 0.871 0.813 0.760 0.711 0.665 0.853 0.789 0.731 0.677 0.627 0.837 0.766 0.703 0.645 0.592 0.820 0.744 0.676 0.614 0.558 0.804 0.722 0.650 0.585 0.527 0.788 0.701 0.625 0.557 0.497 0.773 0.681 0.601 0.530 0.469 0.758 0.661 0.577 0.505 0.442 0.743 0.642 0.555 0.481 0.417 0.728 0.623 0.534 0.458 0.394 0.714 0.605 0.513 0.436 0.371 0.700 0.587 0.494 0.416 0.350 0.686 0.570 0.475 0.396 0.331 0.673 0.554 0.456 0.377 0.312 0.622 0.492 0.390 0.310 0.247 0.610 0.478 0.375 0.295 0.233 0.552 0.412 0.308 0.231 0.174 0.453 0.307 0.208 0.142 0.097 0.372 0.228 0.141 0.087 0.054 0.305 0.170 0.095 0.054 0.030 15% 16% 17% 18% 1.000 1.000 1.000 1.000 0.870 0.862 0.855 0.847 0.756 0.743 0.731 0.718 0.658 0.641 0.624 0.609 0.572 0.552 0.534 0.516 0.497 0.476 0.456 0.437 0.432 0.410 0.390 0.370 0.376 0.354 0.333 0.314 0.327 0.305 0.285 0.266 0.284 0.263 0.243 0.225 0.247 0.227 0.208 0.191 0.215 0.195 0.178 0.162 0.187 0.168 0.152 0.137 0.163 0.145 0.130 0.116 0.141 0.125 0.111 0.099 0.123 0.108 0.095 0.084 0.107 0.093 0.081 0.071 0.093 0.080 0.069 0.060 0.081 0.069 0.059 0.051 0.070 0.060 0.051 0.043 0.061 0.051 0.043 0.037 0.035 0.028 0.023 0.019 0.030 0.024 0.020 0.016 0.015 0.012 0.009 0.007 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 0.000 8% 1.000 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.158 0.146 0.099 0.046 0.021 0.010 20% 1.000 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.013 0.010 0.004 0.001 0.000 0.000 99 1.000 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.126 0.116 0.075 0.032 0.013 0.006 24% 1.000 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 0.026 0.021 0.017 0.014 0.006 0.005 0.002 0.000 0.000 0.000 10% 1.000 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.102 0.092 0.057 0.022 0.009 0.003 28% 1.000 0.781 0.610 0.477 0.373 0.291 0.227 0.178 0.139 0.108 0.085 0.066 0.052 0.040 0.032 0.025 0.019 0.015 0.012 0.009 0.007 0.003 0.002 0.001 0.000 0.000 0.000 11% 1.000 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 0.082 0.074 0.044 0.015 0.005 0.002 32% 1.000 0.758 0.574 0.435 0.329 0.250 0.189 0.143 0.108 0.082 0.062 0.047 0.036 0.027 0.021 0.016 0.012 0.009 0.007 0.005 0.004 0.001 0.001 0.000 0.000 0.000 0.000 12% 1.000 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.066 0.059 0.033 0.011 0.003 0.001 36% 1.000 0.735 0.541 0.398 0.292 0.215 0.158 0.116 0.085 0.063 0.046 0.034 0.025 0.018 0.014 0.010 0.007 0.005 0.004 0.003 0.002 0.001 0.000 0.000 0.000 0.000 0.000 Period, 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 24 25 30 40 50 60 14% 1.000 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.043 0.038 0.020 0.005 0.001 0.000 19% 1.000 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.015 0.013 0.005 0.001 0.000 0.000 40% 1.000 0.714 0.510 0.364 0.260 0.186 0.133 0.095 0.068 0.048 0.035 0.025 0.018 0.013 0.009 0.006 0.005 0.003 0.002 0.002 0.001 0.000 0.000 0.000 0.000 0.000 0.000 TABLEM Present Value of an Annuity Interest Factor (PVIFA) ($1 per period at P per period for n periods): 1- PVIFA PVAN, = PMT (PVIFA1,0) i 11% Period, 1% 2% 3% 4% 5% 6% 7% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 6 5.795 5.601 5.417 5.242 5.076 4.917 4.766 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 8 7,652 7.325 7.020 6.733 6.463 6.210 5.971 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 19 17.226 15.678 14324 13.134 12.085 11.158 10.336 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 24 21.24318.914 16.936 15.247 13.799 12.550 11.469 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 30 25,808 22.397 19.600 17.292 15.373 13.765 12.409 40 32.835 27.355 23.115 19.793 17.159 15.046 13.332 50 39.196 31.424 25.730 21.482 18.256 15.762 13.801 60 44.955 34.761 27.676 22.623 18.929 16.161 14.039 Period, 14% 15% 16% 17% 1896 1996 1 0.877 0.870 0.862 0.855 0.847 0.840 2 1.647 1.626 1.605 1.585 1.566 1.547 3 2.322 2.283 2.246 2210 2.174 2.140 4 2.914 2.855 2.798 2.743 2.690 2.639 5 3.433 3.352 3.274 3.199 3.127 3.058 6 3.889 3.784 3.685 3.589 3.498 3.410 7 4.288 4.160 4,039 3.922 3.812 3.706 8 4.639 4.487 4.344 4.207 3.954 9 4.946 4.772 4.607 4.451 4.303 4.163 10 5.216 5.019 4.833 4.659 4.494 4.339 11 5.453 5.234 5.029 4.836 4.656 4.486 12 5,660 5.421 5.197 4.988 4.793 4.611 13 5.842 5.583 5342 5.118 4.910 4.715 14 6.002 5.724 5.468 5.229 5.008 4.802 15 6.142 5.847 5.575 5.324 5.092 4.876 16 6.265 5.954 5669 5.405 5.162 4.938 17 6.373 6.047 5.749 5.475 5.222 4.990 18 6.467 6.128 5.818 5.534 5.273 5.033 19 6.550 6.198 5.877 5.584 5.316 5.070 20 6.623 6.259 5.929 5.628 5.353 5.101 24 6.835 6.434 6,073 5.746 5.451 5.182 25 6.873 6.464 6.097 5.766 5.467 5.195 30 7.003 6.566 6.177 5.829 5.517 5.235 40 7.105 6.642 6.233 5.871 5.548 5.258 50 7.133 6.661 6.246 5.880 5.554 5.262 60 7,140 6.665 6.249 5.882 5.555 5.263 13% 0.885 1.668 2361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.283 7.330 7.496 7.634 7.675 7.687 8% 0.926 1.783 2.577 3.312 3.993 4623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.529 10.675 11.258 11.925 12.233 12.377 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.193 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.844 4.870 4.937 4.948 4.979 4.997 4.999 5.000 9% 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.312 8.544 8.756 8.950 9.128 9.707 9.823 10.274 10.757 10.962 11.048 24% 0.806 1.457 1.981 2.404 2.745 3.020 3.242 3.421 3.566 3.682 3.776 3.851 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7824 8.022 8.201 8.365 8.514 8.985 9.077 9.427 9.779 9.915 9.967 28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 3.503 3.518 3.529 3.539 3.546 3.562 3.564 3.569 3.571 3.571 3.571 0.901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 8.348 8.422 8.694 8.951 9.042 9.074 32% 0.758 1332 1.766 2.096 2.345 2.534 2.678 2.786 2.868 2.930 2.978 3.013 3.040 3.061 3.076 3.088 3.097 3.104 3.109 3.113 3.121 3.122 3.124 3.125 3.125 3.125 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.784 7843 8.055 8.244 8.304 8.324 36% 0.735 1.276 1.674 1.966 2.181 2.399 2.455 2.540 2.603 2.650 2.683 2.708 2.727 2.740 2.750 2.758 2.763 2.767 2.770 2.772 2.776 2.776 2.778 2.778 2.778 2.778 4,078 3.912 40% 0.714 1.224 1.589 1849 2,035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.499 2.499 2.500 2.500 2.500 2.500 3.962 4.001 4.033 4.059 4.080 4.097 4.110 4.143 4.147 4.160 4.166 4.167 4.167