Question Content Area Present value of $1 Periods 6% 8% 10% 12% 14%...
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Accounting
Question Content Area
Present value of $1
Periods
6%
8%
10%
12%
14%
16%
1
0.94340
0.92593
0.90909
0.89286
0.87719
0.86207
2
0.89000
0.85734
0.82645
0.79719
0.76947
0.74316
3
0.83962
0.79383
0.75131
0.71178
0.67497
0.64066
4
0.79209
0.73503
0.68301
0.63552
0.59208
0.55229
5
0.74726
0.68058
0.62092
0.56743
0.51937
0.47611
6
0.70496
0.63017
0.56447
0.50663
0.45559
0.41044
7
0.66506
0.58349
0.51316
0.45235
0.39964
0.35383
8
0.62741
0.54027
0.46651
0.40388
0.35056
0.30503
9
0.59190
0.50025
0.42410
0.36061
0.30751
0.26295
10
0.55839
0.46319
0.38554
0.32197
0.26974
0.22668
Present value of an annuity of $1
Periods
6%
8%
10%
12%
14%
16%
1
0.94340
0.92593
0.90909
0.89286
0.87719
0.86207
2
1.83339
1.78326
1.73554
1.69005
1.64666
0.74316
3
2.67301
2.57710
2.48685
2.40183
2.32163
0.64066
4
3.46511
3.31213
3.16987
3.03735
2.91371
0.55229
5
4.21236
3.99271
3.79079
3.60478
3.43308
0.47611
6
4.91732
4.62288
4.35526
4.11141
3.88867
0.41044
7
5.58238
5.20637
4.86842
4.56376
4.28830
0.35383
8
6.20979
5.74664
5.33493
4.96764
4.63886
0.30503
9
6.80169
6.24689
5.75902
5.32825
4.94637
0.26295
10
7.36009
6.71008
6.14457
5.65022
5.21612
0.22668
Layton Company is considering two competing projects that will change its current manufacturing process. The after-tax cash flows associated with the two investments are as follows:
Year
Project X
Project Y
0
$(71,000)
$(285,000)
1
---
159,820
2
89,063
159,820
The company's cost of capital is 10%.
A. Compute the net present value for Project X. (Round answer to the nearest dollar.) fill in the blank 1 of 8$
B. Compute the net present value for Project Y. (Round answer to the nearest dollar.) fill in the blank 2 of 8$
C. Compute the internal rate of return for Project X. (Round discount factor to five decimal places.) fill in the blank 3 of 8 %
D. Compute the internal rate of return for Project Y. (Round discount factor to five decimal places.) fill in the blank 4 of 8 %
E. Which project should be chosen and why? Project fill in the blank 5 of 8
should be chosen because its fill in the blank 6 of 8
is greater than the fill in the blank 7 of 8
of Project fill in the blank 8 of 8
Answer & Explanation
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