calculate present value factor at 10% and present values and net present value Year 0 1 2

calculate  present value factor at 10% and present values and net present value 

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Year 0 1 2 3 4 Investment flows New equipment $(15,000) (10,080) 120 Software ($16,800 x 60%)a Old equipment ($200 60%).. Annual cash flows ($16,000 x 60%). Depreciation tax shield ($5,000 x 40%) Disinvestment flows ($2,000 x 60%) Total cash flows.... Present value factor at 10%. Present valuesb Net present value $9,600 $9,600 $9,600 $ 9,600 2,000 2,000 2,000 1,200 $(24,960) $11,600 $11,600 $11,600 $10,800 1.000 0.909 0.826 0.751 0.683 $(24,960) $10,544 $ 9,582 $ 8,712 $ 7,376 $ 11,254 a 60% = 1-40% tax rate, which converts before-tax flows to after-tax flows. b Present value factor shown is rounded to three places. Present value factors are shown in Exhibit A.8. Year 0 1 2 3 4 Investment flows New equipment $(15,000) (10,080) 120 Software ($16,800 x 60%)a Old equipment ($200 60%).. Annual cash flows ($16,000 x 60%). Depreciation tax shield ($5,000 x 40%) Disinvestment flows ($2,000 x 60%) Total cash flows.... Present value factor at 10%. Present valuesb Net present value $9,600 $9,600 $9,600 $ 9,600 2,000 2,000 2,000 1,200 $(24,960) $11,600 $11,600 $11,600 $10,800 1.000 0.909 0.826 0.751 0.683 $(24,960) $10,544 $ 9,582 $ 8,712 $ 7,376 $ 11,254 a 60% = 1-40% tax rate, which converts before-tax flows to after-tax flows. b Present value factor shown is rounded to three places. Present value factors are shown in Exhibit A.8.