Net Present Value Method and Internal Rate of Return Method for a service company Keystone...

60.1K

Verified Solution

Question

Accounting

image
image
Net Present Value Method and Internal Rate of Return Method for a service company Keystone Healthcare Corp. is proposing to spend $178,624 on a seven-year project that has estimated net cash flows of $32,000 for each of the seven years. Present Value of an Annuity of $1 at Compound Interest Year 69 1094 129 1596 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 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 3.605 3.352 2.991 4.917 4.355 4.111 3.784 3:326 090 5.582 4.868 4.564 4.160 3.605 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 a. Compute the net present value, using a rate of return of 10%. Use the table of present value of an annuity of $presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value a. Compute the net present value, using a rate of return of 10%. Use the table of present value of an annuity of $1 presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value. Present value of annual net cash flows Les amount to be invested Net present value b. Based on the analysered in part (a), is the rate of return (1) more than 10%, (2) 100 (1) than 100% c. Determine the internal rate of return by computing a present valun factor for any atuty of $1 and using the table of the procent value of an outy of 31 presented above

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students