2 Fraser Company will need a new warehouse in five years. The warehouse will cost $500,000 to build. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. 3 points Required: What lump-sum amount should the company invest now to have the $500,000 available at the end of the five-year period? Assume that the company can invest money at: (Round your final answers to the nearest whole dollar amount.) Answer is complete but not entirely correct. Present Value 1. $ Ten percent Fourteen percent 35,100 X 35,100 X 2. $ 7 The management of Ballard Micro Brew is considering the purchase of an automated bottling machine for $71,000. The machine would replace an old piece of equipment that costs $18,000 per year to operate. The new machine would cost $8,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $26,000. The new machine would have a useful life of 10 years with no salvage value. 5 points Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Answer is not complete. 1. Depreciation expense 2. 3 Incremental net operating income Initial estment Simple rate of return 4. 6.4 %