Subject: acounting 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:Period5Click here to6%4.212368%3.99271Present Value of an Annuity of 19%3.8896510%3.7907911%12%3.69590 3.6047815%3.35216 Compute 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 0 decimal places, e.g. 5,275.)Net present value $Profitability index(b)4.2211.03Show Transcribed TextInternal rate of returnGCCompute the internal rate of return on this project. (For calculation purposes, use 5 decimal places as displayed in the factor tableprovided. Round answer to O decimal places, eg. 11%)

Internal rate of return: - IRR is the minimum rate of return that must be earned by a company to…

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. It is estimated that the project will generate annual cash flows of $42,400 each year. The company requires a 9% rate of return and uses the following compound interest table: Period 5 6% 4.21236 3.99271 8% Present Value of an Annuity of 1 9% 3.88965 10% 3.79079 11% 12% 3.69590 3.60478 15% 3.35216

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. It is estimated that the project will generate annual cash flows of $42,400 each year. The company requires a 9% rate of return and uses the following compound interest table: Period 5 6% 4.21236 3.99271 8% Present Value of an Annuity of 1 9% 3.88965 10% 3.79079 11% 12% 3.69590 3.60478 15% 3.35216

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.2P

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