image.jpg Net present valueA project has estimated annual net cash flows of $225,000 for 8 years and is estimated to cost $800,000. Assume a minimum acceptable rate of return of 6%. Use the PresentValue of an Annuity of $1 at Compound Interest table below.Present Value of an Annuity of $1 at Compound InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83321.8331.7361.6901.6261.52832.6732.4872.4022.2832.10643.4653.1703.0372.8552.58954.2123.7913.6053.3532.99164.9174.3554.1113.7853.32675.5824.8684.5644.1603.60586.2105.3354.9684.4873.83796.8025.7595.3284.7724.031107.3606.1455.6505.0194.192Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value.Net present value of the project (round to the nearest dollar)Present value index (rounded to two decimal places)

Given information, Annual net cash flows = $225,000Number of periods (n) = 8 yearsInitial investment…

Answered: Net present value A project has…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3BE

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