Root Products is trying to decide which of the following projects to invest in: • Project A costs $260,000 and offers se

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Root Products Is Trying To Decide Which Of The Following Projects To Invest In Project A Costs 260 000 And Offers Se 1 (40 KiB) Viewed 22 times

Root Products is trying to decide which of the following projects to invest in: • Project A costs $260,000 and offers seven annual net cash inflows of $62,000. • Project B costs $390,000 and offers nine annual net cash inflows of $72,000. Compute the IRR of each project and use this information to identify the better investment. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) First, compute the IRR of each project. The IRR for Project A is The IRR for Project B is is better because the IRR (Click the icon to view the present value table.) (Click the icon to view the future value table.)
net cas et cash ation to table.) ble.) Reference Present Value of Annuity of $1 0.952 1.859 5% 6% 8% 10% 12% 14% 0.943 0.926 0.909 0.893 1.833 1.783 1.736 1.690 2.723 2.673 2.577 2.487 2.402 3.546 3.465 3.312 3.170 3.037 4.329 4.212 Periods 1% 2% 3% 4% 18% 20% 16% 0.877 0.862 0.847 Period 1 0.962 0.833 Period 2 1.942 1.913 1.647 1.605 1.566 1.528 Period 3 0.990 0.980 0.971 1.970 1.886 2.941 2.884 2.829 2.775 3.902 3.808 3.717 3.630 4.853 4.713 4.580 4.452 Period 4 Period 5 Period 6 2.322 2.246 2.174 2.106 2.914 2.798 2.690 2.589 3.993 3.791 3.605 3.433 3.274 3.127 2.991 3.889 3.685 3.498 4.288 4.039 3.812 4.639 4.344 4.078 4.946 4.607 4.303 5.216 4.833 4.494 3.326 3.605 Period 7 6.728 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 6.472 5.786 5.582 5.206 4.868 4.564 7.325 7.020 6.463 6.210 5.747 5.335 4.968 6.802 6.247 5.759 5.328 6.710 6.145 5.650 6.230 6.002 6.733 Period 8 7.652 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 4.192 4.327 4.533 5.008 4.611 5.092 4.675 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6.002 5.468 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.575 Period 20 18.046 6.623 5.929 5.353 Period 25 22.023 Period 30 25.808 Period 40 32.835 4.870 4.948 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 7.003 6.177 5.517 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 6.233 5.548 4.979 4.997 X
Reference Future Value of Annuity of $1 4% 5% 10% 12% 14% 16% 18% 20% 2% 3% 1.000 1.000 1.000 Period 1 1.000 1.000 1.000 1.000 1.000 2.010 2.020 Period 2 2.140 2.160 2.180 2.200 Period 3 3.440 3.506 1.000 1.000 2.100 3.310 3.374 4.641 4.779 6.105 6.353 3.572 3.030 3.060 4.060 3.640 Period 4 5.066 5.215 5.368 6% 8% 1.000 1.000 1.000 2.030 2.040 2.050 2.060 2.080 3.091 3.122 3.153 3.184 3.246 4.122 4.184 4.246 4.310 4.375 4.506 5.204 5.309 5.416 5.526 5.637 5.867 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 19.337 4.921 6.610 Period 5 5.101 6.877 7.154 7.442 Period 6 8.977 9.442 9.930 Period 7 11.414 12.142 12.916 Period 8 15.327 16.499 14.240 17.519 19.086 Period 9 20.799 Period 10 21.321 23.521 25.959 Period 11 32.150 25.733 28.755 30.850 34.931 Period 12 39.581 Period 13 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27.271 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 37.581 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 36.786 42.219 48.497 Period 14 43.672 50.818 59.196 Period 15 51.660 60.965 72.035 Period 20 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 Period 25 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 249.214 342.603 471.981 Period 30 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 530.312 790.948 1,181.882 Period 40 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343.858 Periods 1%
Reference Present Value of $1 Periods 1% 2% 3% 5% 6% 8% 12% 14% 16% 18% 20% Period 1 0.990 0.980 0.971 0.877 0.862 0.847 0.833 Period 2 0.980 0.961 0.943 0.769 0.743 0.718 0.694 4% 10% 0.962 0.952 0.943 0.926 0.909 0.893 0.925 0.907 0.890 0.857 0.826 0.797 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 Period 3 0.971 0.942 0.915 0.579 Period 4 0.961 0.924 0.888 0.482 Period 5 0.951 0.476 0.437 0.402 Period 6 0.88 0. .790 0.746 0.70 0.410 0.370 0.335 Period 7 0.933 Period 8 0.923 0. 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.789 0.731 0.677 0.627 0.540 0.467 0.703 0.645 0.592 0.500 0.424 0.676 0.614 0.558 0.463 0.386 0.853 0.837 0.766 07 0.452 0.400 0.354 0.314 0.279 0.404 0.351 0.305 0.266 0.233 0.361 0.308 0.263 0.225 0.194 0.322 0.270 Period 9 0.914 Period 10 0.905 0.820 0.744 0.227 0.191 0.162 0.804 0.722 Period 11 0.896 Period 12 0.887 0.650 0.625 0.788 0.701 Period 13 0.879 0.773 0.681 0.601 Period 14 0.870 0.758 0.661 0.577 Period 15 0.861 0.743 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.554 0.456 0.377 0.312 0.478 0.375 0.295 0.233 0.308 0.231 0.642 0.555 Period 20 0.820 0.673 0.073 0.051 0.037 0.026 Period 25 0.780 0.610 0.010 0.215 0.149 0.104 0.146 0.092 0.059 99 0.057 0.03 0.046 Period 30 0.742 0.552 0.038 0.024 0.016 20 0.005 0.003 0.001 07 0.004 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.022 0.011 0.001 X
Reference Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 25 Period 30 Period 40 - Future Value of $1 4% 1% 2% 3% 1.010 1.020 1.030 1.020 1.040 1.061 5% 1.040 1.050 6% 8% 1.060 1.080 10% 12% 14% 1.100 1.120 1.140 1.210 1.254 1.300 1.331 1.405 1.482 1.561 1.464 1.574 1.689 1.811 1.611 1.762 1.925 16% 18% 20% 1.160 1.180 1.200 1.346 1.392 1.440 1.643 1.030 1.061 1.728 1.041 1.082 1.093 1.126 1.159 1.939 2.074 1.051 1.104 2.100 2.288 2.488 1.062 1.126 2.436 2.700 2.986 2.826 3.185 3.583 1.072 1.149 1.083 1.172 1.267 1.082 1.103 1.124 1.166 1.125 1.158 1.191 1.260 1.170 1.216 1.262 1.360 1.217 1.276 1.338 1.469 1.194 1.265 1.340 1.419 1.587 1.772 1.974 2.195 1.230 1.316 1.407 1.504 1.714 1.949 2.211 2.502 1.369 1.477 1.594 1.851 2.144 2.476 2.853 3.278 3.759 4.300 1.094 1.195 1.305 1.423 1.551 1.689 1.999 2.358 2.773 3.252 3.803 4.435 5.160 1.105 1.219 1.344 1.480 1.629 1.791 2.159 2.594 3.106 3.707 4.411 5.234 6.192 1.539 1.710 1.898 2.332 2.853 3.479 4.226 5.117 6.176 1.426 1.601 1.796 2.012 2.518 3.138 3.896 4.818 5.936 7.288 1.665 1.886 2.133 2.720 3.452 4.363 5.492 6.886 8.599 2.261 2.937 3.172 1.116 1.243 1.384 7.430 1.127 1.268 8.916 1.138 1.294 1.469 10.699 1.149 1.319 1.513 1.732 1.980 12.839 3.797 4.887 6.261 7.988 10.147 4.177 5.474 7.138 9.266 11.974 1.161 1.346 1.558 1.801 2.079 2.397 15.407 1.220 1.486 1.806 2.191 2.653 3.207 38.338 1.282 1.641 2.094 2.666 3.386 4.292 95.396 4.661 6.727 9.646 13.743 19.461 27.393 6.848 10.835 17.000 26.462 40.874 62.669 5.743 10.063 17.449 29.960 50.950 85.850 143.371 237.376 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1,469.772 1.348 1.811 2.427 3.243 4.322 1.489 2.208 3.262 4.801 7.040 X