. 12% (42,500) B E F 1 See Uncertain Cash Flows Daily Activity 2 Use the present value tables on pages 670 & 671 Exhibits 120.1 & 12B.2 3 4 (Ignore income taxes in this problem.) Koala Kody's Eucalyptus Confections uses a discount rate in its capital budgeting of: 5 6 7 8 Partial analysis of an investment in automated equipment with a useful life of 5 years has thus far yielded a net present value of: 9 10 11 This analysis did not include any estimates of the intangible benefits of automating this process 12 nor did it include any estimate of the salvage value of the equipment 13 14 15 16 (a) Ignoring any salvage value, how large would the additional cash flow per year from the intangible benefits 17 have to be to make the investment in the automated equipment financially attractive? (Round to the nearest dollar.) 18 19 20 29 (b) Ignoring any cash flows from intangible benefits, how large would the salvage value of the automated equipment 30 have to be to make the investment in the automated equipment financially attractive? (Round to the nearest dollar.) 31 32 33 34 35 D E F G . Project AM Project BJ Project KN Project RT Project VY 150,000 $ 250,000 $ 300,000 $ 350,000 $ 250,000 B 1 2 3 K & M Sales has the following capital budget for 2021: 550,000 4 5 Here is the information for each of the projects being considered: 6 The cost of capital used for the discount rate is 12% 7 Initial Investment 8 Annual Cash Flows (including salvage): 9 2022 10 2023 11 2024 2024 12 12 2025 2020 13 2020 2026 14 17 2027 15 2028 16 2029 17 2030 18 2031 19 49,000 48,000 48,000 65,000 42,500 42,500 50,000 50,000 50,000 50,000 50,000 50,000 50,000 68,000 80.000 80,000 80,000 80,000 120,000 88,000 88,000 88,000 88,000 88,000 95,000 42,500 42,500 42,500 42,500 42,500 42,500 42,500 92,000 Which projects should K & M Sales invest in for 2021? (show your work and the reason for your answer) Annuity rate for 3 years Annuity rate for 4 years Annuity rate for 5 years Annuity rate for 7 years Annuity rate for 9 years PV of 1 rate for 4 years PV of 1 rate for 5 years PV of 1 rate for 6 years PV of 1 rate for 8 years PV of 1 rate for 10 years 2.40183 3.03735 3.60478 4.56376 5.32825 0.63552 0.56743 0.50663 0.40388 0.32197