6-4

6-5

Mini-Exercise 16-7 (Algo) Net present ratio and IRR LO 16-7 Lakeside incorporated is considering replacing old production equipment with state-of-the art technology that will allow production cost savings of $10,000 per month. The new equipment will have a five-yeat life and cost $450,000, with an estimated salvage value of $40,000. Lakeside's cost of capital is 10%. Table 64 and Table 6.5. Required: Calculate the present value ratio of the new production equipment Note: Use oppropriote factor(s) from the tables provided. Round the PV foctors to 4 decimals. Round your answer to 2 decimal places