Net Present Value A project has estimated annual net cash flows of $6,250 for eight years and is estimated to cost $37,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of...

Extracted text: Net Present Value A project has estimated annual net cash flows of $6,250 for eight years and is estimated to cost $37,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table 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 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 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 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. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places) Feedback V Check My Work a. Multiply the present value factor for an annuity of $1 factor for eight years and 15% by the annual net cash flow. Subtract the amount to be invested.