A company that manufactures recreational pedal boats has approached Michael Cichanowski to ask if he would be interested in using Current Designs rotomold expertise and equipment to produce some of the pedal boat components. Michael is intrigued by the idea and thinks it would be an interesting way of complementing the present product line. One of Michacl's hesitations about the proposal is that the pedal boats are a different shape than the kayaks that Current Designs produces, As a result, the company would need to buy an additional rotomold oven in order to produce the pedal boat components. This project clearly involves risks, and Michael wants to make sure that the returns justify the risks. In this case, since this is a new venture, Michael thinis that a 15% discount rate is appropriate to use to evaluate the project. As an intern at Current Designs, Michael has asked you to prepare an initial evaluation of this proposal. To aid in your analysis, he has provided the following information and assumptions. 1. The new rotomold oven will have a cost of $316,000, a salvage value of $0, ard an 8 -year useful life. Straight-line depreciation will be used. 2. The projected revenues, costs, and results for each of the 8 years of this project are as follows. 1. Ine new rotomold oven wil nave a cost or $310,000, a salvage value or $0, and an 8 -year userut ife. Straight-ine d will be used. 2. The projected revenues, costs, and results for each of the 8 years of this project are as follows. Your answer is incorrect. Compute the annual rate of return. (Round answer to 2 decimal places, e.g. 15.25\%.) Annual rate of return % Compute the payback period. (Round answer to 2 decimal places, e.g. 15.25.) Payback period years Compute the net present value using a discount rate of 6%. (If the net present value is negative, use either a negative sign preceding the number es. -45 or parentheses es (45). Round answer to 0 decimal places, eg. 125. For calculation purposes, use 5 decimal places as displayed in the foctor table provided.) Net present value Should the proposal be accepted using this discount rate? the proposal. Compute the net present value using a discount rate of 15%. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses es. (45). Round answer to 0 decimal places, eg. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value $ Should the proposal be accepted using this discount rate? the proposal. TABLE 1 Future Value of 1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline (n) & & & & & & & & & & \\ \hline Periods & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 11% & 12% & 15% \\ \hline 0 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 \\ \hline 1 & 1.04000 & 1.05000 & 1.06000 & 1.07000 & 1.08000 & 1.09000 & 1.10000 & 1.11000 & 1.12000 & 1.15000 \\ \hline 2 & 1.08160 & 1.10250 & 1.12360 & 1.14490 & 1.16640 & 1.18810 & 1.21000 & 1.23210 & 1.25440 & 1.32250 \\ \hline 3 & 1.12486 & 1.15763 & 1.19102 & 1.22504 & 1.25971 & 1.29503 & 1.33100 & 1.36763 & 1.40493 & 1.52088 \\ \hline 4 & 1.16986 & 1.21551 & 1.26248 & 1.31080 & 1.36049 & 1.41158 & 1.46410 & 1.51807 & 1.57352 & 1.74901 \\ \hline 5 & 1.21665 & 1.27628 & 1.33823 & 1.40255 & 1.46933 & 1.53862 & 1.61051 & 1.68506 & 1.76234 & 2.01136 \\ \hline 6 & 1.26532 & 134010 & 1.41852 & 1.50073 & 1.58687 & 1.67710 & 1.77156 & 1.87041 & 1.97382 & 2.31306 \\ \hline 7 & 1.31593 & 1.40710 & 1.50363 & 1.60578 & 1.71382 & 1.82804 & 1.94872 & 2.07616 & 2.21068 & 2.66002 \\ \hline 8 & 1.36857 & 1,47746 & 1.59385 & 1.71819 & 1.85093 & 1.99256 & 2.14359 & 2.30454 & 2.47596 & 3.05902 \\ \hline 9 & 1.42331 & 1.55133 & 1.68948 & 1.83846 & 1.99900 & 2.17189 & 2.35795 & 2.55803 & 2.77308 & 3.51788 \\ \hline 10 & 1.48024 & 1.62889 & 1.79085 & 1.96715 & 2.15892 & 2.36736 & 2.59374 & 2.83942 & 3.10585 & 4.04556 \\ \hline 11 & 1.53945 & 1.71034 & 1.89830 & 2.10485 & 2.33164 & 2.58043 & 2.85312 & 3.15176 & 3,47855 & 4,65239 \\ \hline 12 & 1.60103 & 1.79586 & 2.01220 & 2.25219 & 2.51817 & 2.81267 & 3.13843 & 3.49845 & 3.89598 & 5.35025 \\ \hline 13 & 1.66507 & 1.88565 & 2.13293 & 2,40985 & 2.71962 & 3.06581 & 3.45227 & 3.88328 & 4.36349 & 6.15279 \\ \hline 14 & 1.73168 & 1.97993 & 2.26090 & 2.57853 & 2.93719 & 3.34173 & 3.79750 & 4.31044 & 4.88711 & 7.07571 \\ \hline 15 & 1.80094 & 2.07893 & 2.39656 & 2,75903 & 3.17217 & 3.64248 & 4.17725 & 4.78459 & 5.47357 & 8.13706 \\ \hline 16 & 1.87298 & 2.18287 & 2.54035 & 2.95216 & 3.42594 & 3.97031 & 4.59497 & 5.31089 & 6.13039 & 9.35762 \\ \hline 17 & 1.94790 & 2.29202 & 2.69277 & 3.15882 & 3.70002 & 4,32763 & 5,05447 & 5.89509 & 6.86604 & 10.76126 \\ \hline 18 & 2.02582 & 2,40662 & 2.85434 & 3.37993 & 3.99602 & 4.71712 & 5.55992 & 6.54355 & 7.68997 & 12.37545 \\ \hline 19 & 2.10685 & 2.52695 & 3.02560 & 3.61653 & 4.31570 & 5.14166 & 6.11591 & 7.26334 & 8,61276 & 14.23177 \\ \hline 20 & 2.19112 & 2.65330 & 3,20714 & 3.86968 & 4.66096 & 5.60441 & 6.72750 & 8.06231 & 9.64629 & 16.36654 \\ \hline \end{tabular} TABLE 2 Future Value of an Annuity of 1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{c} (n) \\ Payments \end{tabular} & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 11% & 12% & 15% \\ \hline 1 & 1.00000 & 1.00000 & 1.00000 & 1.0000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1.00000 & 1,00000 \\ \hline 2 & 2.04000 & 2.05000 & 2.06000 & 2.0700 & 2,08000 & 2.09000 & 2.10000 & 2.11000 & 2,12000 & 2.15000 \\ \hline 3 & 3,12160 & 3.15250 & 3.18360 & 3.2149 & 3.24640 & 3.27810 & 3.31000 & 3.34210 & 3.37440 & 3,47250 \\ \hline 4 & 4.24646 & 4.31013 & 4.37462 & 4.4399 & 4.50611 & 4.57313 & 4.64100 & 4.70973 & 4.77933 & 4.99338 \\ \hline 5 & 5.41632 & 5.52563 & 5.63709 & 5.7507 & 5.86660 & 5.98471 & 6.10510 & 6.22780 & 6.35285 & 6.74238 \\ \hline 6 & 6,63298 & 6.80191 & 6.97532 & 7.1533 & 7,33592 & 7.52334 & 7.71561 & 7.91286 & 8.11519 & 8.75374 \\ \hline 7 & 7.89829 & 8.14201 & 8.39384 & 8.6540 & 8.92280 & 9.20044 & 9.48717 & 9.78327 & 10.08901 & 11,06680 \\ \hline 8 & 9.21423 & 9.54911 & 9.89747 & 10.2598 & 10.63663 & 11.02847 & 11.43589 & 11.85943 & 12.29969 & 13.72682 \\ \hline 9 & 10.58280 & 11.02656 & 11.49132 & 11.9780 & 12.48756 & 13.02104 & 13.57948 & 14.16397 & 14.77566 & 16.78584 \\ \hline 10 & 12.00611 & 12.57789 & 13.18079 & 13.8164 & 14.48656 & 15.19293 & 15.93743 & 16.72201 & 17.54874 & 20.30372 \\ \hline 11 & 13.48635 & 14.20679 & 14.97164 & 15.7836 & 16.64549 & 17.56029 & 18.53117 & 19.56143 & 20.65458 & 24.34928 \\ \hline 12 & 15.02581 & 15.91713 & 16.86994 & 17.8885 & 18.97713 & 20.14072 & 21.38428 & 22.71319 & 24.13313 & 29.00167 \\ \hline 13 & 16.62684 & 17.71298 & 18.88214 & 20.1406 & 21.49530 & 22.95339 & 24.52271 & 26.21164 & 28.02911 & 34.35192 \\ \hline 14 & 18.29191 & 19.59863 & 21.01507 & 22.5505 & 24.21492 & 26.01919 & 27.97498 & 30.09492 & 32,39260 & 40,50471 \\ \hline 15 & 20.02359 & 21.57856 & 23.27597 & 25.1290 & 27.15211 & 29.36092 & 31.77248 & 34.40536 & 37.27972 & 47.58041 \\ \hline 16 & 21.82453 & 23.65749 & 25.67253 & 27.8881 & 30.32428 & 33.00340 & 35.94973 & 39.18995 & 42.75328 & 55.71747 \\ \hline 17 & 23.69751 & 25,84037 & 28.21288 & 30.8402 & 33.75023 & 36.97351 & 40.54470 & 44.50084 & 48.88367 & 65.07509 \\ \hline 18 & 25.64541 & 28.13238 & 30.90565 & 33.9990 & 37.45024 & 41.30134 & 45.59917 & 50.39593 & 55.74972 & 75.83636 \\ \hline 19 & 27.67123 & 30,53900 & 33.75999 & 37.3790 & 41.44626 & 46.01846 & 51.15909 & 56.93949 & 63.43968 & 88.21181 \\ \hline 20 & 29.77808 & 33.06595 & 36.78559 & 40.9955 & 45.76196 & 51.16012 & 57.27500 & 64.20283 & 72.05244 & 102.44358 \\ \hline \end{tabular} TABLE 3 Present Value of 1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{c} (n) \\ Periods \end{tabular} & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 11% & 12% & 15% \\ \hline 1 & 96154 & 95238 & 94340 & 0.93458 & 92593 & 91743 & 90909 & 90090 & 89286 & 86957 \\ \hline 2 & 92456 & 90703 & 89000 & 0.87344 & .85734 & .84168 & 82645 & 81162 & .79719 & .75614 \\ \hline 3 & 88900 & .86384 & 83962 & 0.81630 & .79383 & .77218 & .75132 & .73119 & .71178 & .65752 \\ \hline 4 & 85480 & 82270 & .79209 & 0.76290 & .73503 & .70843 & .68301 & .65873 & .63552 & 57175 \\ \hline 5 & 82193 & .78353 & .74726 & 0.71299 & .68058 & .64993 & .62092 & 59345 & .56743 & .49718 \\ \hline 6 & .79031 & .74622 & .70496 & 0.66634 & .63017 & .59627 & 56447 & 53464 & 50663 & .43233 \\ \hline 7 & .75992 & .71068 & .66506 & 0.62275 & 58349 & 54703 & .51316 & .48166 & .45235 & 37594 \\ \hline 8 & .73069 & .67684 & .62741 & 0.58201 & .54027 & 50187 & .46651 & 43393 & 40388 & 32690 \\ \hline 9 & 70259 & 64461 & 59190 & 0.54393 & 50025 & .46043 & .42410 & 39092 & 36061 & .28426 \\ \hline 10 & .67556 & .61391 & 55839 & 0.50835 & .46319 & .42241 & .38554 & .35218 & 32197 & .24719 \\ \hline 11 & .64958 & .58468 & 52679 & 0.47509 & .42888 & .38753 & .35049 & .31728 & 28748 & .21494 \\ \hline 12 & 62460 & 55684 & 49697 & 0,44401 & .39711 & .35554 & .31863 & .28584 & .25668 & .18691 \\ \hline 13 & .60057 & 53032 & .46884 & 0.41496 & 36770 &, 32618 & .28966 & .25751 & .22917 & 16253 \\ \hline 14 & 57748 & 50507 & 44230 & 0.38782 & 34046 & .29925 & .26333 & 23199 & .20462 & .14133 \\ \hline 15 & 55526 & 48102 & 41727 & 0.36245 & 31524 & .27454 & .23939 & 20900 & .18270 & .12289 \\ \hline 16 & 53391 & 45811 & 39365 & 0.33873 & 29189 & .25187 & .21763 & .18829 & .16312 & .10687 \\ \hline 17 & 51337 & .43630 & .37136 & 0.31657 & .27027 & .23107 & .19785 & .16963 & .14564 & .09293 \\ \hline 18 & 49363 & 41552 & 35034 & 0.29586 & .25025 & 21199 & .17986 & .15282 & .13004 & .08081 \\ \hline 19 & 47464 & 39573 & .33051 & 0.27615 & .23171 & .19449 & .16351 & .13768 &, 11611 & .07027 \\ \hline 20 & .45639 & 37689 & .31180 & 0.25842 & .21455 & .17843 & .14864 & .12403 & .10367 & .06110 \\ \hline \end{tabular} TABLE 4 Present Value of an Annuity of 1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{c} (n) \\ Payments \end{tabular} & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 11% & 12% & 15% \\ \hline 1 & 96154 & 95238 & 94340 & 0.93458 & .92593 &, 91743 & .90909 & 90090 & .89286 & .86957 \\ \hline 2 & 1.88609 & 1.85941 & 1.83339 & 1.80802 & 1.78326 & 1.75911 & 1.73554 & 1.71252 & 1.69005 & 1.62571 \\ \hline 3 & 2,77509 & 2.72325 & 2.67301 & 2.62432 & 2.57710 & 2.53130 & 2.48685 & 2.44371 & 2.40183 & 2.28323 \\ \hline 4 & 3.62990 & 3.54595 & 3.46511 & 3,38721 & 3.31213 & 3.23972 & 3.16986 & 3.10245 & 3.03735 & 2.85498 \\ \hline 5 & 4.45182 & 4.32948 & 4.21236 & 4.10020 & 3.99271 & 3.88965 & 3.79079 & 3.69590 & 3.60478 & 3.35216 \\ \hline 6 & 5.24214 & 5.07569 & 4.91732 & 4.76654 & 4.62288 & 4,48592 & 4.35526 & 4.23054 & 4.11141 & 3.78448 \\ \hline 7 & 6.00205 & 5.78637 & 5.58238 & 5.38929 & 5.20637 & 5,03295 & 4.86842 & 4.71220 & 4.56376 & 4.16042 \\ \hline 8 & 6.73274 & 6.46321 & 6.20979 & 5.97130 & 5.74664 & 5.53482 & 5.33493 & 5.14612 & 4.96764 & 4.48732 \\ \hline 9 & 7.43533 & 7.10782 & 6.80169 & 6.51523 & 6.24689 & 5.99525 & 5.75902 & 5.53705 & 5.32825 & 4.77158 \\ \hline 10 & 8.11090 & 7.72173 & 7.36009 & 7.02358 & 6.71008 & 6.41766 & 6.14457 & 5.88923 & 5.65022 & 5.01877 \\ \hline 11 & 8.76048 & 8.30641 & 7.88687 & 7.49867 & 7.13896 & 6.80519 & 6.49506 & 6.20652 & 5.93770 & 5.23371 \\ \hline 12 & 9.38507 & 8.86325 & 8.38384 & 7.94269 & 7,53608 & 7.16073 & 6.81369 & 6.49236 & 6.19437 & 5.42062 \\ \hline 13 & 9.98565 & 9.39357 & 8.85268 & 8.35765 & 7.90378 & 7.48690 & 7.10336 & 6.74987 & 6.42355 & 5.58315 \\ \hline 14 & 10.56312 & 9.89864 & 9.29498 & 8.74547 & 8.24424 & 7.78615 & 7.36669 & 6.98187 & 6.62817 & 5,72448 \\ \hline 15 & 11.11839 & 10.37966 & 9.71225 & 9.10791 & 8.55948 & 8.06069 & 7.60608 & 7.19087 & 6.81086 & 5.84737 \\ \hline 16 & 11.65230 & 10.83777 & 10.10590 & 9.44665 & 8.85137 & 8.31256 & 7,82371 & 7,37916 & 6,97399 & 5,95424 \\ \hline 17 & 12.16567 & 11.27407 & 10.47726 & 9.76322 & 9.12164 & 8.54363 & 8.02155 & 7.54879 & 7.11963 & 6.04716 \\ \hline 18 & 12.65930 & 11.68959 & 10.82760 & 10.05909 & 9.37189 & 8.75563 & 8.20141 & 7.70162 & 7.24967 & 6.12797 \\ \hline 19 & 13.13394 & 12.08532 & 11.15812 & 10.33560 & 9.60360 & 8.95012 & 8.36492 & 7.83929 & 7.36578 & 6.19823 \\ \hline 20 & 13.59033 & 12.46221 & 11.46992 & 10.59401 & 9.81815 & 9.12855 & 8.51356 & 7.96333 & 7.46944 & 6.25933 \\ \hline \end{tabular}