A project has estimated annual net cash flows of $15,000 for seven years and is estimated to cost $40,000. Assume a minimum acceptable rate of return of 10%. Use thePresent Value of an Annuityof $1 at Compound Interesttable below.
Present Value of an Annuity of $1 at Compound Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589
5
4.212
3.791
3.605
3.353
2.991
6
4.917
4.355
4.111
3.785
3.326
7
5.582
4.868
4.564
4.160
8
6.210
5.335
4.968
4.487
3.837
9
6.802
5.759
5.328
4.772
4.031
10
7.360
6.145
5.650
5.019
4.192
Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value.
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here