3. Fielding Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $910,000. Projected net cash inflows are as follows: 1 (Click the icon to view the projected net cash inflows.) 2 (Click the icon to view the present value table.) 3 (Click the icon to view the present value annuity table.) (Click the icon to view the future value table.) 5 (Click the icon to view the future value annuity table.) Read the requirements 4 Requirement 1. Compute this project's NPV using Fielding Industries' 16% hurdle rate. Should Fielding Industries invest in the equipment? Why or why not? Begin by computing the project's NPV (net present value). (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Net present value Fielding Industries (1) invest in the equipment because its NPV is (2) Requirement 2. Fielding Industries could refurbish the equipment at the end of six years for $101,000. The refurbished equipment could be used one more year, providing $76,000 of net cash inflows in Year 7. In addition, the refurbished equipment would have a $52,000 residual value at the end of Year 7. Should Fielding Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the additional NPV provided from the refurbishment. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Additional NPV provided from refurbishment The refurbishment provides a (3) NPV. The refurbishment NPV is (4). to overcome the original NPV of the equipment. Therefore, the refurbishment (5) investment. alter Fielding Industries' original decision regarding the equipment 1: Data Table 1: Data Table Year 1. $265,000 Year 2.. $251,000 Year 3. $228,000 Year 4. $213,000 Year 5. $200,000 Year 6. $173,000 2: Reference Present Value of $1 3% 4% 5% 6% 8% 12% 14% 16% 18% 20% 0.971 0.943 0.915 0.888 0.863 0.962 0.925 0.889 0.855 0.822 0.952 0.907 0.864 0.823 0.943 0.890 0.840 0.792 0.747 0.926 0.857 0.794 0.735 0.681 10% 0.909 0.826 0.751 0.683 0.621 0.893 0.797 0.712 0.636 0.567 0.877 0.769 0.675 0.592 0.519 0.862 0.743 0.641 0.552 0.476 0.847 0.718 0.609 0.516 0.437 0.833 0.694 0.579 0.482 0.402 0.784 0.790 0.564 0.837 0.813 0.789 0.766 Periods 1% 2% Period 1 0.990 0.980 Period 2 0.9800.961 Period 3 0.971 0.942 Period 4 0.961 0.924 Period 5 0.951 0.906 Period 6 0.942 0.888 Period 7 0.933 0.871 Period 8 0.923 0.853 Period 9 0.914 0.837 Period 10 0.905 0.820 Period 11 0.896 0.804 Period 120.887 0.788 Period 130.879 0.773 Period 14 0.870 0.758 Period 15 0.861 0.743 Period 200.820 0.673 Period 25 0.780 0.610 Period 30 0.742 0.552 Period 40 0.672 0.453 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.630 0.583 0.540 0.500 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.410 0.370 0.400 0.354 0.314 0.351 0.305 0.266 0.308 0.263 0.225 0.270 0.227 0.191 0.335 0.279 0.233 0.194 0.162 0.744 0.463 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.557 0.530 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.135 0.112 0.093 0.078 0.505 0.481 0.239 0.287 0.237 0.195 0.162 0.257 0.208 0.168 0.137 0.229 0.182 0.145 0.116 0.205 0.160 0.125 0.099 0.183 0.140 0.108 0.084 0.104 0.073 0.051 0.037 0.059 0.038 0.024 0.016 0.033 0.020 0.012 0.007 0.011 0.005 0.003 0.001 0.065 0.554 0.478 0.456 0.377 0.375 0.295 0.308 0.231 0.208 0.142 0.312 0.215 0.233 0.146 0.174 0.099 0.097 0.046 0.149 0.092 0.057 0.022 0.026 0.010 0.004 0.412 0.307 0.001 3. Reference 18% 20% 0.847 1.566 0.833 1.528 2.174 2.690 3.127 2.106 2.589 2.991 3: Reference Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 Period 2 1.970 1.942 1.9131.886 1.859 1.833 1.783 1.736 1.690 1.647 1.605 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 Period 5 4.853 4.7134.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 Period 7 6.728 6.4726.230 6.002 5.786 5.5825.206 4.868 4.564 4.288 4.039 Period 8 7.652 7.325 7.020 6.7336.463 6.210 5.747 5.335 4.968 4.639 4.344 Period 9 8.566 8.1627.786 7.435 7.108 6.8026.247 5.759 5.328 4.946 4.607 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.6505.216 4.833 Period 11 10.368 9.787 9.2538.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.8146.194 5.660 5.197 Period 13 12.134 11.348 10.635 9.986 9.3948.853 7.904 7.103 6.424 5.842 5.342 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 6.002 5.468 Period 15 13.865 12.849 11.938 11.118 10.380 9.7128.559 7.606 6.811 6.142 5.575 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.469 6.623 5.929 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.4278.055 7.003 6.177 Period 40 32.835 27.355|23.115 19.793 17.159 15.046 11.925 9.7798.244 7.105 6.233 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 4: Reference 4: Reference Future Value of $1 2% 3% 4% 5% 8% 12% 16% 20% 1.080 1.020 1.040 1.030 1.061 1.050 1.103 1.166 1% 1.010 1.020 1.030 1.041 1.051 6% 1.060 1.124 1.191 1.262 1.338 10% 1.100 1.210 1.331 1.464 1.611 1.040 1.082 1.125 1.170 1.217 14% 1.140 1.300 1.482 1.689 1.925 1.160 1.346 1.561 1.093 18% 1.180 1.392 1.643 1.939 2.288 1.061 1.082 1.104 1.120 1.254 1.405 1.574 1.762 1.158 1.216 1.276 1.260 1.360 1.469 1.200 1.440 1.728 2.074 2.488 1.126 1.159 1.811 2.100 1.587 1.974 2.436 1.194 1.230 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.340 1.407 1.477 1.551 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 25 Period 30 Period 40 1.265 1.316 1.369 1.423 1.480 1.267 1.419 1.504 1.594 1.689 1.791 2.826 3.278 1.772 1.949 2.144 2.358 2.594 1.714 1.851 1.999 2.159 2.195 2.502 2.853 3.252 3.707 2.211 2.476 2.773 3.106 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 3.803 1.305 1.344 1.629 4.411 1.384 1.898 1.116 1.127 3.479 3.896 1.426 1.138 1.243 1.268 1.294 1.319 1.346 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 1.469 1.513 1.558 2.332 2.518 2.720 2.937 3.172 2.012 2.133 2.261 2.397 4.363 2.853 3.138 3.452 3.797 4.177 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 1.149 1.161 4.887 5.474 1.220 1.282 1.348 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 4.292 6.848 10.835 | 17.000 26.462 40.87462.669 95.396 5.743 10.063 17.449 29.960 50.950 85.850 143.371 237.376 10.286 21.725 45.259 | 93.051 188.884378.721 750.3781,469.772 1.489 4.122 5: Reference Future Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 Period 3 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.640 Period 4 4.060 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 5.215 5.368 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 Period 6 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.930 Period 7 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12.916 Period 8 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 14.240 15.327 16.499 Period 9 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17.519 19.086 20.799 Period 10 10.462 10.950 11.464 12.006 12.578 13.181 14.48715.937 17.549 19.337 21.321 23.521 25.959 Period 11 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 28.755 32.150 Period 12 12.683 13.412 14.192 15.026 15.917 | 16.870 18.977 21.384 24.133 27.271 30.850 34.931 39.581 Period 13 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 42.219 48.497 Period 14 14.947 15.974 17.086 18.292 19.599 21.015 24215 27.975 32.393 37.581 43.672 50.818 59.196 Period 15 16.097 17.29318.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 60.965 72.035 Period 20 22.019 24.29726.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 Period 25 28.243 32.030 36.459 41.646 | 47.727 54.865 73.106 98.347 133.334 181.871 249.214 342.603 471.981 Period 30 34.785 40.568 47.575 56.08566.439 79.058 113.283 164.494241.333 356.787 530.312 790.948 1,181.882 Period 40 48.886 60.40275.401 95.02G 120.800 151.762 259.057 142.593 767.0911.312.025 2.360.757 4.163.2137.343.858