could you please answer this question and put the steps Tha

could you please answer this question and put the steps :) Thankk you !!!

Net Present Value Method and Internal Rate of Return Method for a service company Buckeye Healthcare Corp. is proposing to spend $82,745 on a six-year project that has estimated net cash flows of $19,000 for each of the six years Present Value of an Annuity of $1 at Compound Interest 6% 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 12% 0.893 1.690 2.402 3.037 3.605 1590 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 Year 2 5 4.564 4.968 5.328 5.650 10

Solution

Requirement (a)

Present Value of Annual cash flows [$19,000 x 4.111]

$78,109

Less : Amount to be Invested

$ 82,745

Net Present Value [Negative NPV]

$ (4,636)

Requirement (b)

Rate of Return is less than 12%

Requirement (c)

Internal Rate of Return = 10%

Internal Rate of Return Factor

= Net Initial Investment / Annual Cash Flow

= $ 82,745 / 19,000

= 4.355

From the given Present Value Annuity Factor Table [PVIFA], We can find that the discount rate (IRR) corresponding to the factor of 4.355 for 6 Years is equals to 10%

Present Value of Annual cash flows [$19,000 x 4.111]	$78,109
Less : Amount to be Invested	$ 82,745
Net Present Value [Negative NPV]	$ (4,636)