Question
not sure how to get the present value index?
engage ttps://v2.cengagenow.com/ilrn/takeA AssignmentMain do?i er: take ? ? Net Present Value A project has estimated annual net cash flows of $6,800 for five years and is estimated to cost $23,125. Assume a minimum acceptable rate of return of 12%, use the Present Value of an Annuity of $1 at Compound Interest table below Present Value of an Annuity of $1 at Compound Interest Year 600 10% 12% 15% 20% 10.943 0.9090.8930.870 0.833 1.736 1.690 1.626 1.523 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.60s 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 1.833 9 Determine (1) the net present value of the project and (2) the present value index. (1) Net present value of the project (rounded to the nearest dollar) $(-1,389 (2) Present value index (rounded to two decimal places) 4:51 PM 6/13/20189
Explanation / Answer
Present value index = Present value of cash inflow/Present value of cash outflow
= 24514/23125
Present value index = 1.06
