2017 Data Int Door Metal Roof pant201 Sheet for Selections C

2017 Data Int. Door Metal Roof pant201 Sheet for ..Selections Colors html Help Save & Exit Submit Check my work The following information relates to three independent investment decisions, each with a 10-year ife and no salvage value Using the present value tables in Exhibits 26-3 and 26-4 compute the missing information pertaining to each investment proposal Round \"PV factors\" to 3 decimal places and your final answers to the nearest whole dollar amount.) S 79.178 noremenital annual cash inflows 5,500 Discount rate yielding a net prosent valun of z

Solution

Npv is zero where PV of inflow is equal to outflow.

PV of outflow=PV of net inflow

Project a)

Net inflow. =18000-5500=12500

PV of annual inflow for 10years at 10%discount =PVAF(10%,10)*12500=6.145*12500=76812.50

Initial outflow =76812.50

Project B

141250=PVAF(12%,10)*annual net inflow

Annual net inflow=141250/5.650=25000

Annual net inflow =(37000-incremental outflow)

Incremental outflow=37000-25000=12000

ANSWER is 12000.

Project C

79178=PVAF(r,n)*(19000-7200)

PVAF(r,10)=79178/11800=6.71

THEN seeing in table r =8%

8%is the answer.