a. Determine the average rate of return for a project that is estimated to yield total income of $419,900 over five years, has a cost of $769,100, and has a $114,900 residual value. Round to the nearest whole number.
Net Present Value
A project has estimated annual net cash flows of $8,750 for three years and is estimated to cost $50,000. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below.
|Present Value of an Annuity of $1 at Compound Interest|
Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value.
|Net present value of the project (round to the nearest dollar)||$|
|Present value index (rounded to two decimal places)|