29 Zachary Electronics is considering investing in manufacturing equipment expected to cost $390,000. The equipment has an estimated useful life of four years and a salvage value of $23,000. It is expected to produce incremental cash revenues of $195,000 per year. Zachary has an effective income tax rate of 30 percent and a desired rate of return of 14 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Determine the net present value and the present value index of the investment, assuming that Zachary uses straight-line depreciation for financial and income tax reporting. b. Determine the net present value and the present value index of the investment, assuming that Zachary uses double-declining- balance depreciation for financial and income tax reporting. d. Determine the payback period and unadjusted rate of return (use average investment), assuming that Zachary uses straight-line depreciation. e. Determine the payback period and unadjusted rate of return (use average investment), assuming that Zachary uses double- declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) Complete this question by entering your answers in the tabs below. Req A and B Req D and E Determine the net present value and the present value index of the investment, assuming that Harper uses straight-line depreciation and double-declining-balance for financial and income tax reporting. (Round your answers for "Net present value" to the nearest whole dollar amount and your answers for "Present value index" to 2 decimal places.) Net present value Present value index a. b. d. e. Req A and B Req D and E Determine the payback period and unadjusted rate of return (use average investment), assuming that Harper uses straight- line depreciation and double-declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) (Round your answers to 2 decimal places.) Payback period Unadjusted rate of return years years % % < Req A and B Req D and E > Show less TABLE 1 PRESENT VALUE OF $1 4 123456789 4% 10% 12% 14% 16% n 5% 6% 7% 8% 9% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 0.924556 0.907029 0.889996 0.873439 0.857339 0.841680 0.826446 0.797194 0.769468 0.743163 0.694444 0.888996 0.863838 0.839619 0.816298 0.793832 0.772183 0.751315 0.711780 0.674972 0.640658 0.578704 0.854804 0.822702 0.792094 0.762895 0.735030 0.708425 0.683013 0.635518 0.592080 0.552291 0.482253 0.821927 0.783526 0.747258 0.712986 0.680583 0.649931 0.620921 0.567427 0.519369 0.476113 0.401878 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.455587 0.410442 0.334898 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 0.513158 0.452349 0.399637 0.353830 0.279082 8 0.730690 0.676839 0.627412 0.582009 0.540269 0.501866 0.466507 0.403883 0.350559 0.305025 0.232568 9 0.702587 0.644609 0.591898 0.543934 0.500249 0.460428 0.424098 0.360610 0.307508 0.262953 0.193807 10 0.675564 0.613913 0.558395 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0.161506 11 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 0.350494 0.287476 0.236617 0.195417 0.134588 12 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.318631 0.256675 0.207559 0.168463 0.112157 13 0.600574 0.530321 0.468839 0.414964 0.367698 0.326179 0.289664 0.229174 0.182069 0.145227 0.093464 14 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 0.263331 0.204620 0.159710 0.125195 0.077887 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.182696 0.140096 0.107927 0.064905 16 0.533908 0.458112 0.393646 0.338735 0.291890 0.251870 0.217629 0.163122 0.122892 0.093041 0.054088 17 0.513373 0.436297 0.371364 0.316574 0.270269 0.231073 0.197845 0.145644 0.107800 0.080207 0.045073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179859 0.130040 0.094561 0.069144 0.037561 19 0.474642 0.395734 0.330513 0.276508 0.231712 0.194490 0.163508 0.116107 0.082948 0.059607 0.031301 0.456387 0.376889 0.311805 0.258419 0.214548 0.178431 0.148644 0.103667 0.072762 0.051385 0.026084 20 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 n 1 4% 0.961538 5% 0.952381 6% 0.943396 7% 0.934579 8% 9% 0.925926 0.917431 12345698 a 1.886095 1.859410 1.833393 1.808018 2.775091 2.723248 2.673012 2.624316 3.629895 3.545951 3.465106 3.387211 2.577097 3.312127 4.451822 4.329477 4.212364 4.100197 5.242137 5.075692 4.917324 4.766540 7 6.002055 5.786373 5.582381 5.389289 6.732745 6.463213 6.209794 5.971299 9 7.435332 7.107822 6.801692 6.515232 10 8.110896 7.721735 7.360087 7.023582 3.992710 4.622880 5.206370 5.746639 6.246888 5.995247 6.710081 10% 0.909091 1.783265 1.759111 1.735537 2.531295 2.486852 3.239720 3.169865 3.889651 3.790787 4.485919 4.355261 5.032953 4.868419 5.534819 5.334926 5.759024 4.563757 4.967640 12% 14% 16% 20% 0.892857 0.877193 0.862069 0.833333 1.690051 1.646661 1.605232 1.527778 2.401831 2.321632 2.245890 2.106481 3.037349 2.913712 2.798181 2.588735 3.604776 3.433081 3.274294 2.990612 4.111407 3.888668 4.288305 4.638864 3.684736 3.325510 4.038565 3.604592 4.343591 3.837160 5.328250 4.946372 4.606544 4.030967 6.417658 6.144567 5.650223 5.216116 4.833227 4.192472 11 8.760477 8.306414 7.886875 7.498674 7.138964 12 9.385074 8.863252 8.383844 7.942686 7.536078 13 9.985648 14 10.563123 15 11.118387 9.393573 8.852683 8.357651 7.903776 9.898641 9.294984 8.745468 8.244237 6.805191 6.495061 7.160725 6.813692 7.486904 7.103356 7.786150 7.366687 5.937699 5.452733 6.194374 5.660292 5.028644 4.327060 5.197107 4.439217 6.423548 5.842362 5.342334 4.532681 6.628168 6.002072 5.467529 4.610567 10.379658 9.712249 9.107914 8.559479 8.060688 7.606080 6.810864 6.142168 5.575456 4.675473 16 11.652296 10.837770 10.105895 9.446649 8.851369 8.312558 7.823709 6.973986 17 12.165669 18 12.659297 11.274066 10.477260 11.689587 10.827603 9.763223 9.121638 10.059087 9.371887 8.543631 8.755625 8.021553 8.201412 7.119630 7.249670 19 13.133939 20 13.590326 12.085321 11.158116 12.462210 11.469921 10.335595 10.594014 9.603599 8.905115 8.364920 9.818147 7.365777 9.128546 8.513564 7.469444 6.623131 6.265060 5.668497 4.729561 6.372859 5.748704 4.774634 6.467420 5.817848 4.812195 6.550369 5.877455 4.843496 5.928841 4.869580