Subject: Marigold Company is considering investing in a project that will cost $160,700 and have no salvage value at the end of its 5-year life. Itis estimated that the project will generate annual cash flows of $42,400 each year. The company requires a 9% rate of return and usesthe following compound interest table:Period56%(a)4.212368%Click here to view PV tables.3.99271Net present value.Present Value of an Annuity of 19%10%11%3.88965 3.79079 3.6959012%3.6047815%3.35216Compute the net present value and the profitability index of the project. (For calculation purposes, use 5 decimal places as displayedin the factor table provided. Round profitability index to 2 decimal places, e.g. 15.25 and net present value to O decimal places, eg. 5,275) m the factor table provided. Round profitability index to 2 decimal places, e.g. 15.25 and net present value to 0Compute the net present value and the profitability index of the project. (For calculation purposes, use 5 décimal places as displayeddecimal places, e.g. 5,275.)Net present value $Profitability index

Annuity is a series of equal payment at equal interval for a specified period. Present value of…

ing investing in a project that will cost $160,700 and have no salvage value at the end o s estimated that the project will generate annual cash flows of $42,400 each year. The company requires a 9% rate of the following compound interest table: Period 5 6% 8% 4.21236 3.99271 Click here to view PV tables. Present Value of an Annuity of 1 9% 10% 3.88965 3.79079 11% 3.69590 12% 3.60478 15% 3.35216

ing investing in a project that will cost $160,700 and have no salvage value at the end o s estimated that the project will generate annual cash flows of $42,400 each year. The company requires a 9% rate of the following compound interest table: Period 5 6% 8% 4.21236 3.99271 Click here to view PV tables. Present Value of an Annuity of 1 9% 10% 3.88965 3.79079 11% 3.69590 12% 3.60478 15% 3.35216

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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