please read the instructions on the first picture, and answer the missing boxes on the second picture. thank you for your time. PR26-1A Average rate of return method, net present value method, andanalysisThe capital investment committee of Nature's Portrait Landscaping Company isconsidering two capital investments. The estimated income from operations andnet cash flows from each investment are as follows:2345TotalFront-End LoaderIncome fromYear Operations1$25,00020,0007,0003,0001,250$56,250Instructions:Net CashFlow$40,00035,00022,00018,00016,250$131,250Greenhouse FixturesIncome fromOperations$11,25011,25011,25011,25011,250$56,250Net CashFlow$26,25026,25026,25026,25026,250$131,250Each project requires an investment of $75,000. Straight-line depreciation will beused, and no residual value is expected. The committee has selected a rate of 12%for purposes of the net present value analysis.1. Compute the following:a. The average rate of return for each investment. Round to one decimalpoint.b. The net present value for each investment. Use the present value of $1table appearing in this chapter (Exhibit 2). Round present values to thenearest dollar. Problem 26-1AabQuestion 1Average annual rate of return for both projectsNet Present Value for Front-End LoaderNet Present Value for Greenhouse FixturesI%

Net Present Value (NPV) is a widely used financial analysis method or tool for evaluating the…

Answered: Problem 26-1A a b Question 1 Average…

Problem 26-1A a b Question 1 Average annual rate of return for both projects Net Present Value for Front-End Loader Net Present Value for Greenhouse Fixtures i

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Net Present Value Method, Present Value Index, and Analysis First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $787,317 $584,976 $298,035 Annual net cash flows: Year 1 391,000 278,000 164,000 Year 2 364,000 250,000 113,000 Year 3 332,000 222,000 82,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 10%,…
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