261,000 Year 1 $ Year 2 254,000 Year 3 223,000 Year 4 Year 5 Year 6 214,000 205,000 177,000 Present Value of $1 Periods 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 14% 0.877 0.769 0.675 0.592 0.519 0.456 15% 0.870 0.756 0.658 0.572 0.497 0.400 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.351 0.308 0.270 0.237 6% 7% 0.943 0.935 0.890 0.873 0.840 0.816 0.792 0.763 0.747 0.713 0.705 0.666 0.665 0.623 0.627 0.582 0.592 0.544 0.558 0.508 0.527 0.475 0.497 0.444 0.469 0.415 0.442 0.388 0.417 0.362 0.394 0.339 0.371 0.317 0.350 0.296 0.331 0.277 0.3120.258 0.887 0.208 3% 4% 0.971 0.962 0.943 0.925 0.915 0.889 0.888 0.855 0.863 0.822 0.837 0.790 0.813 0.760 0.789 0.731 0.766 0.703 0.744 0.676 0.722 0.650 0.701 0.625 0.681 0.601 0.661 0.577 0.642 0.555 0.623 0.534 0.605 0.513 0.587 0.494 0.570 | 0.475 0.554 0.456 0.538 0.439 0.522 0.422 0.507 0.406 0.492 0.390 0.478 0.375 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 | 0.359 0.342 0.326 0.310 0.295 8% 9% 0.926 0.917 0.8570.842 0.794 0.772 | 0.735 | 0.708 0.681 0.650 0.630 0.596 0.583 0.547 0.540 0.502 0.500 0.460 0.463 0.422 0.429 0.388 0.397 0.356 0.368 0.326 0.340 0.299 0.315 0.275 0.292 0.252 0.270 0.231 0.250 0.212 0.232 | 0.194 0.215 | 0.178 0.199 | 0.164 0.184 0.150 0.170 0.138 0.158 0.126 0.146 0.116 10% 12% 0.909 0.893 0.826 0.797 0.751 0.712 0.683 0.636 0.621 0.567 0.564 0.507 0.513 0.452 0.467 0.404 0.424 0.361 0.386 0.322 0.350 0.287 0.319 0.257 0.290 0.229 0.263 0.205 0.239 0.183 0.218 0.163 0.1980.146 0.1800.130 0.164 0.116 0.149 0.104 0.135 0.093 0.123 0.083 0.112 0.074 0.102 0.066 0.092 0.059 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.064 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 16% 18% 20% 0.862 0.847 0.833 0.743 0.7180.694 0.641 0.609 0.579 0.552 0.516 | 0.482 0.476 0.437 0.402 0.410 0.370 0.335 0.354 0.314 0.279 0.305 0.266 0.233 0.263 0.225 0.194 0.227 0.191 0.162 0.195 0.162 0.135 0.168 0.137 0.112 0.145 0.116 0.093 0.125 0.099 0.078 0.108 0.084 0.065 0.093 0.071 0.054 0.080 | 0.060 0.045 0.069 0.051 0.038 | 0.060 0.043 0.031 0.051 0.037 0.026 0.044 0.031 0.022 0.038 0.018 0.033 0.022 0.015 0.028 0.019 0.013 0.024 0.016 0.010 0.811 0.803 0.056 0.026 0.795 0.660 0.647 0.634 0.622 0.610 0.294 0.278 0.262 0.247 0.233 0.242 0.226 0.211 0.197 0.184 0.053 0.046 0.040 0.035 0.030 0.049 0.043 0.038 0.788 0.780 Periods 14% 0.877 1.647 2.322 2.914 3.433 20% 0.833 1.528 2.106 2.589 2.991 1% 2% 3% 4% 0.990 0.980 0.971 0.962 1.970 1.942 1.913 1.886 2.9412.884 | 2.829 2.775 3.902 3.808 3.717 3.630 4.853 4.713 4.580 4.452 5.795 5.601 5.417 5.242 6.728 6.472 6.230 6.002 7.652 7.325 7.020 6.733 8.566 8.162 7.786 | 7.435 9.471 8.983 8.530 8.111 10.368 9.787 9.253 8.760 11.255 | 10.575 9.954 9.385 12.134 11.348 10.635 9.986 13.004 12.106 11.296 10.563 13.865 12.849 11.938 11.118 14.718 13.578 12.561 11.652 15.562 14.292 13.166 12.166 16.398 14.992 13.754 12.659 17.226 15.678 14.324 13.134 18.046 16.351 14.877 13.590 18.857 17.011 15.415 14.029 17.658 15.937 14.451 20.456 18.292 16.444 14.857 21.243 18.914 16.936 15.247 22.023 19.523 17.413 15.622 Present Value of Ordinary Annuity of $1 5% 6% 7% 8% 9% 10% 0.952 0.943 0.935 0.926 0.917 0.909 1.859 | 1.8331.8081.783 1.759 1.736 2.723 2.673 2.624 2.577 2.531 2.487 3.546 3.465 3.387 3.312 3.240 3.170 4.329 4.212 4.100 3.993 3.890 3.791 5.076 4.917 4.767 4.623 | 4.486 4.355 5.786 5.582 5.389 5.206 5.033 4.868 6.463 6.210 5.971 5.747 5.535 5.335 7.108 6.802 6.515 6.247 5.995 5.759 7.722 7.360 7.024 6.710 6.418 6.145 8.306 7.887 7.499 7.139 6.805 6.495 8.863 8.384 7.943 | 7.536 7.161 6.814 9.394 8.853 8.358 7.904 7.487 7.103 9.899 9.295 8.745 8.244 7.786 7.367 10.380 9.712 9.108 8.559 8.061 7.606 10.838 10.106 9.447 8.851 8.313 7.824 11.274 10.477 9.763 9.122 8.544 8.022 11.690 10.828 10.059 9.372 8.756 8.201 12.085 11.158 10.336 9.604 8.950 8.365 12.462 11.470 10.594 | 9.818 9.129 8.514 12.821 11.764 10.836 10.017 | 9.292 8.649 13.163 12.042 11.061 10.2019.442 8.772 13.489 12.303 11.272 10.371 9.580 8.883 13.799 12.550 11.469 10.529 9.707 8.985 14.094 12.783 11.654 10.675 9.823 9.077 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 18% 0.847 1.566 2.174 2.690 | 3.127 3.498 3.812 | 4.078 | 4.303 4.494 4.656 | 4.793 15% 16% 0.870 0.862 1.626 1.605 2.283 2.246 2.855 2.798 3.352 3.274 3.784 3.685 | 4.160 4.039 4.487 4.344 4.772 4.607 5.019 4.833 5.234 5.029 5.421 5.197 5.583 5.342 5.724 5.468 5.847 5.575 5.954 5.669 6.047 5.749 6.128 5.818 6.1985.877 6.259 5.929 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.910 5.008 | 5.092 5.162 5.222 5.273 5.316 5.353 4.730 4.775 4.812 4.844 4.870 19.660 7.562 7.645 7.718 | 7.784 7.843 6.687 6.743 6.792 6.835 6.873 6.3125.973 6.3596.011 6.399 6.044 6.4346.073 6.464 6.097 5.384 5.410 5.432 5.451 5.467 4.891 4.909 4.925 4.937 4.948 1. Compute this project's NPV using Venu's 14% hurdle rate. Should Venu invest in the equipment? 2. Venu could refurbish the equipment at the end of six years for $105,000. The refurbished equipment could be used one more year, providing $72,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $53,000 residual value at the end of vear 7. Should Venu invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Requirement 1. Compute this project's NPV using Venu's 14% hurdle rate. Should Venu invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash Inflow PV Factor (i-14%) Present Value Years Present value of each year's inflow: (n = 1) 2 (n=2) 3 (n = 3) (n = 6) Total PV of cash inflows Initial investment Net present value of the project Enter any number in the edit fields and then click Check Answer Venu Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $925,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. Compute this project's NPV using Venu's 14% hurdle rate. Should Venu invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.)