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...

Present Value of an Annuity of $1 at Compound Interest<br>Year<br>6%<br>10%<br>12%<br>15%<br>20%<br>1<br>0.943<br>0.909<br>0.893<br>0.870<br>0.833<br>2<br>1.833<br>1.736<br>1.690<br>1.626<br>1.528<br>2.673<br>2.487<br>2.402<br>2.283<br>2.106<br>4<br>3.465<br>3.170<br>3.037<br>2.855<br>2.589<br>4.212<br>3.791<br>3.605<br>3.353<br>2.991<br>6.<br>4.917<br>4.355<br>4.111<br>3.785<br>3.326<br>7<br>5.582<br>4.868<br>4.564<br>4.160<br>3.605<br>8<br>6.210<br>5.335<br>4.968<br>4.487<br>3.837<br>6.802<br>5.759<br>5.328<br>4.772<br>4.031<br>10<br>7.360<br>6.145<br>5.650<br>5.019<br>4.192<br>a. Determine the net present value of Project 1 over a six-year life with residual value, assuming a minimum rate of return of 6%. If required, round to the nearest<br>dollar.<br>b. Which project provides the greatest net present value?<br>

Extracted text: 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 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 3.605 8 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine the net present value of Project 1 over a six-year life with residual value, assuming a minimum rate of return of 6%. If required, round to the nearest dollar. b. Which project provides the greatest net present value?

Net Present Value-Unequal Lives<br>Project 1 requires an original investment of $57,000. The project will yield cash flows of $9,000 per year for 8 years. Project 2 has a computed net present value of<br>$11,900 over a six-year life. Project 1 could be sold at the end of six years for a price of $37,000.<br>Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below.<br>Present Value of $1 at Compound Interest<br>Year<br>6%<br>10%<br>12%<br>15%<br>20%<br>1<br>0.943<br>0.909<br>0.893<br>0.870<br>0.833<br>0.890<br>0.826<br>0.797<br>0.756<br>0.694<br>3<br>0.840<br>0.751<br>0.712<br>0.658<br>0.579<br>4<br>0.792<br>0.683<br>0.636<br>0.572<br>0.482<br>5<br>0.747<br>0.621<br>0.567<br>0.497<br>0.402<br>6.<br>0.705<br>0.564<br>0.507<br>0.432<br>0.335<br>7<br>0.665<br>0.513<br>0.452<br>0.376<br>0.279<br>8<br>0.627<br>0.467<br>0.404<br>0.327<br>0.233<br>9.<br>0.592<br>0.424<br>0.361<br>0.284<br>0.194<br>10<br>0.558<br>0.386<br>0.322<br>0.247<br>0.162<br>

Extracted text: Net Present Value-Unequal Lives Project 1 requires an original investment of $57,000. The project will yield cash flows of $9,000 per year for 8 years. Project 2 has a computed net present value of $11,900 over a six-year life. Project 1 could be sold at the end of six years for a price of $37,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6. 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9. 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162

Jun 11, 2022

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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...

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