Answer Happy

Exercise 24-18 (Algo) Net present value, unequal cash flows, and Internal rate of return LO P3, P4 Phoenix Company is considering investments in projects Cland C2. Both require an initial investment of $324.000 and would yield the following annual net cash flows. (PV of $1. FV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows Project 1 Project C2 Year 1 $ 44,280 $ 128,888 Year 2 140,000 128, we Year 3 2e8,eee 128,000 Totals $ 384,80 $ 384,080 a. The company requires a 3% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 8% for (1) Project C1 and (ii) Project C22 Hint: It is not necessary to compute IRR to answer this question. Complete this question by entering your answers in the tabs below. Required A Required B x The company requires a 8% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Present Value Present Value of Project C1 Net Cash Flows of 1 at 8% Net Cash Flows Year 1 Year 2 Year 3 Totals = Project C2 Net Cash Flows х Present Value of 1 at 8% Present Value of Net Cash Flows Year 1 Year 2 Year 3 Totals Which projects, if any, should be accepted < Required A Required B >