$2.$ Joanette, Incorporated, is considering the purchase of a machine that would cost $$590,000$ and would last for $9$ years, at the end of which, the machine would have a salvage value of $$59,000.$ The machine would reduce labor and other costs by $$119,000$ per year. Additional working capital of $$5,000$ would be needed immediately, all of which would be recovered at the end of $9$ years. The company requires a minimum pretax return of $18\%$ on all investment projects. $($Ignore income taxes.$)$

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using the tables provided.

Required:

Determine the net present value of the project.

$3.$ The management of Penfold Corporation is considering the purchase of a machine that would cost $$330,000,$ would last for $7$ years, and would have no salvage value. The machine would reduce labor and other costs by $$63,000$ per year. The company requires a minimum pretax return of $11\%$ on all investment projects.

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using the tables provided.

The net present value of the proposed project is closest to $($Ignore income taxes.$)$: $($Round your intermediate calculations and final answer to the nearest whole dollar amount.$)$

Multiple Choice

$$ $$(45,194)$

$$ $$(21,094)$

$$ $$(8,144)$

$$ $$(33,144)$

$4.$ Crowl Corporation is investigating automating a process by purchasing a machine for $$810,000$ that would have a $9$ year useful life and no salvage value. By automating the process, the company would save $$142,000$ per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $$23,000.$ The annual depreciation on the new machine would be $$90,000.$ The simple rate of return on the investment is closest to $($Ignore income taxes.$)$:

Multiple Choice

$5\mathrm{.}30\%$

$16\mathrm{.}90\%$

$11\mathrm{.}30\%$

$6\mathrm{.}61\%$