2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 12B-1 and Exhibit 12B-2. (Use appropriate factor(s) from the tables provided.) EXHIBIT 12B-1 Present Value of $1; 1 ((1+r))" 0.693 Periods 4% 5% 6% 7% 7 8% 9% % 10% 11% 12% 13% % 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 1 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 | 0.694 0.683 0.672 0.661 0.650 0.640 3 3 0.889 0.864 0.840 0.816 0.7940.772 0.751 0.731 0.712 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 4 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0.423 0.423 0.410 3 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.341 0.328 6 0.790 0.746 0.705 0.666 0.630 0.596 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.319 0.303 0.303 0.289 0.275 0.275 0.262 7 0.760 0.711 0.665 0.623 0.583 0.547 0.547 0.513 0.482 0.482 0.452 0,452 0.425 0.425 0.400 0.376 0.400 0.376 0.354 0.333 0.314 0.314 0.296 0.296 0.279 0.263 0.249 0.249 0.235 0.222 0.210 8 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.404 0.376 0.351 0.327 . 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 1 w 0.148 0.135 and 0.123 0.112 . 12 0.103 Vilmos 0.094 0.625 0.557 0.086 0.444 0.497 .. 0.397 0.356 0.319 0.286 0.257 0.257 0.231 . 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.1020.092 0.083 0.076 0.069 13 0.601 0.530 0.469 WA ace 0.415 0.368 0.326 10 0.258 0.290 0.229 0.204 are 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 14 0.577 0.505 0.442 . 0.340 0.388 0.299 ante 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 17 0.044 15 0.SSS 0.481 0.417 0.362 0.315 0.275 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 V? 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.371 0.317 0.270 V. 0.231 W.21 0.198 0.125 0.170 0.146 W.In 0.108 0.093 0.080 0.069 1 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 18 0.494 0.416 0.410 0.30 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 20 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 21 0.439 0.359 0.294 0.242 0.199 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 23 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.102 0.082 0.066 0.053 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.092 0.074 0.074 0.059 0.047 0.038 0.030 0.024 0.020 | 0.016 0.013 0.010 0.009 0.007 0.006 0.005 0.004 26 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 | 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 27 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0,023 0.018 0.014 0.011 0.009 0.007 0.0016 0.005 0.004 0.003 0.002 0.333 0.255 0.1960.150 0.116 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 29 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.004 0.003 0.003 0.002 0.002 0.002 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.044 0.033 0.020 0,015 0.012 0.009 0.007 0.005 0,004 0.003 0.003 0.002 0.002 0.001 40 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 0.164 28 0.026 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears: 1/r(1-(1/(1+r)^n)) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 | 0.800 2 1.886 1.859 1.833 | 1.808 1.783 1.759 1.736 1.713 | 1.690 1.668 1.647 1.626 1.605 1.585 1.566 | 1.547 1.528 1.509 1.492 1.474 | 1.457 | 1.440 3 2.775 2.723 2.673 2.624 2.624 2.577 2.531 2.487 2.444 2.402 2.402 2.361 2.322 2.283 2.246 2.210 2.174 | 2.140 2.106 2.074 2.042 2.011 1.981 1 1.952 172.174 4 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2014 2.855 2.798 2.743 2.690 2.639 2.639 2.589 2.540 2.494 2.448 2.404 2.362 5 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 we 2.991 2.926 2.864 2.803 2.745 12 2.689 6 5.242 5.076 4.917 4.767 4.623 4.486 4.355 100 4.231 4.111 3.9983.889 3.784 12 3.685 3.589 are 3.498 3410 3.410 3.326 3.245 19 3.167 3.092 100 3.020 2.951 7 6.002 5.786 5.582 5.389 5.206 14-0414 5.033 4.868 wy 4.712 4.564 4.423 4.288 3.922 1922 4.160 4.039 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 8 6.733 1024 6.463 sive 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.6394.487 4.344 4.207 Taree 02 4.078 3.954 3.837 3.726 3.619 3.518 3.421 3.329 9 7.435 100 7.108 6.802 6.515 6.247 5.995 5.759 120 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 . 4.163 4.031 12 112 3.905 3.786 3.673 3.566 3.463 10 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.6505.426 5.216 5.019 4.833 re 4.659 4.494 4.3394.1924.054 3.923 3.799 10 an 3.682 3.571 11 1010 8.760 8.306 7.887 7.499 112 7.139 6.805 6.495 | 6.207 6.207 5.938 5.687 5.453 5.234 5.029 4.836 22 12 4.656 4.486 4.327 4.1774.035 10 12 3.902 3.776 3.656 9.385 8.863 8.384 7.943 vey 7.536 7.161 6.814 sve Fare 6.4926.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4.439 4.278 4.127 120 3.985 3.851 3.725 13 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5.8425.583 5.342 5.118 4.910 4.715 4.533 4.3624.203 4.053 3.912 3.780 site 14 10.563 | 9.899 9.295 8.745 8.244 7.786 | 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 15 11.118 10.380 9.712 101 9.108 ve Pada 8.559 8.061 7.606 7.1916.811 6.462 6.142 5.847 5.575 5.324 we 5,092 4.8764.675 4.489 4.315 4.1534.001 3.859 16 11.652 10.838 10.1069.447 1 8.851 ene 8.313 7.824 we 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 4.189 ca 4.189 4.033 3.887 17 12.166 11.274 10.477 10.4779.763 9.122 110 8.544 8.022 wer 7.549 7.120 6.729 6.373 6.047 l ha ware 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 Vale 18 3.910 12.659 11.690 10.828 10.059 9.372 ante 8.756 8.201 ht 7.702 7.250 6.840 des 6.467 | 6.128 5.818 5.534 an - 5.273 5.0334.812 4.608 4.419 4.243 4.080 3.928 19 13.134 12.085 11.158 10.336 9.604 8.950 8.365 Who wo 7.839 7.366 6.938 6.5506.198 5.584 - 5.877 Water 5.316 5,070 4.843 4.635 4.442 4.263 4.097 3.942 20 13.590 12.462 11.470 10.594 | 9.818 9.129 8.514 7.963 7.469 7.025 Sale 6.623 6.259 5.929 5.628 5,3535.101 4.870 4.657 4.460 4.279 4.2794.110 | 3.954 21 14.029 12.821 11.764 10.836 10.017 9.292 8.075 8.649 7.562 7.102 her Site 6.687 6.3125.9735.665 www 5,384 5.127 4.891 4.675 4.476 4.292 4.121 3.963 22 14.451 13.163 12.042 11.061 10.2019.442 ente 8.772 8.176 7.645 7.170 6.743 __ 6.359 6.011 5,696 5.410 5.149 4.909 4.690 4.488 4.302 4.302 4.1.30 3.970 23 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8.266 7.718 7.230 6.792 6.399 6.044 5.723 5.432 5.167 4.925 4.703 4.499 4.311 4.137 3.976 24 15.247 13.799 12.550 13.799 12.550 11.469 10.529 10.529 9.707 8.985 8.348 7.784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 25 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8.422 7.843 7.330 6.873 6.464 6.097 5.766 5.467 5.1954.948 4.721 4.514 4.323 4.147 3.985 26 15.983 14.375 13.003 11.826 10.8109.929 9.161 8.488 7.896 7.372 6.906 6.491 6.118 5.783 5.480 5.2064.956 4.728 4520 4 328 4.520 4.151 3.988 27 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.935 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4 524 4332 4.154 3.990 28 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 29 16.984 15.141 13.591 12.278 11.158 10.1989.370 8.650 8.022 7.470 6.983 6. SSI 6.166 5.820 5.510 5.229 4.975 4.743 4.743 4.531 4.337 4.159 3.994 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.9794.746 4.979 4.746 4.534 4.339 4.160 3.995 40 19.793 17.159 15.046 13.332 11.925 10.7579.779 8.951 8.244 7.105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 7.634 B D E F G H 1 Chapter 12: Applvina Excel 5 $220,000 $30,000 $30,000 $30,000 $395,000 $250,000 $75,000 18% Years 3 Now 1 2 4 5 3 Data Example E Chet of ruipment needed Name Box bital needed Uvel Taul ui equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate 14 15 Enter a formula into each of the cells marked with a ? below 16 Exhibit 12-8 17 18 19 Purchase of equipment 20 Investment in working capital 21 Sales 22 Cost of goods sold 23 Out-of-pocket operating costs 24 Overhaul of equipment 25 Salvage value of the equipment 26 Working capital released 27 Total cash flows (a) 28 Discount factor (18%) (b) 29 Present value of cash flows (a) (b) 30 Net present value 31 32 *Use the formulas from Appendix 13B: 33 Present value of $1 = 1/(1+r)^n 34 Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) 35 where n is the number of years and r is the discount rate 36 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? cca ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) Net present value c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? The internal rate of return is between % and % d. Reset the discount rate to 18%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage value required to generate a positive present value