A firm, whose cost of capital is 10 percent, may acquire equipment for $113,479 and rent it to someone for a period of five years. Appendix D is the Annuity Chart, the second chart given.

1. If the firm charges $36,290 annually to rent the equipment, what are the net present value and the internal rate of return on the investment? Use Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number.

   NPV: $

   IRR: %

2. If the equipment has no estimated residual value, what must be the minimum annual rental charge for the firm to earn the required 10 percent on the investment? Use Appendix D to answer the question. Round your answer to the nearest dollar.

   $

3. If the firm can sell the equipment at the end of the fifth year for $12,250 and receive annual rent payments of $36,290, what are the net present value and the internal rate of return on the investment? Use Appendix B and Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number.

   NPV: $

   IRR: %

4. If the $12,250 residual resulted in the firm charging only $33,840 for the rental payments, what is the impact on the investments net present value? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

   Reducing the rental payments and recouping it through the residual value reduces the net present value by $ ________?

Interest Factors for the Present Value of One Dollar Time Period (e.gr Year % 2% 3% 4% 5% 6% 7% 8% % 10% 12% 14% 15% 6% 18%,20% 24% 28% 990 980 71 962 952 943 935 926 917909 893 87 870 862 87 833806 781 980 961943 925907.890 873,857842 826 77 769 756 43 718 694 650 610 71942 91589864 840 816794 772 751712675658 64160959524 477 1961924 ,889 855 823 792 763 735 708 .683636 592 572 552 516 482 423 373 1951906 863 822 784747713681 650 621567519497476 437402 341 291 3 2rm 4 5 6 1942 1888 838 790 746 1705 666 630 56 564 507456 432 410 30 335275 1933 871 83 760 711 .665 .623 583 547513 .452 400 36 354 314 279 222 1923 1853 789 731 67.627 582 540 502 467 404 351 327 305 266 233 179 914 837766703 645592 544 500 460 424361308 284 263 1226 194 144 905 820 144 676 614 558 508 463 422386 322 20 247 227 191 162 16 227 178 139 .085 12345 6789m nuBUS 6DB9% ii 237 215 162 195 1896 804 1887 78 1879 773 870 758 1.861743 722 650 701 681 661577 642 555 * 5w 2 Bmw mwwmwww 55 527 45 429 388 350 287 557497444 37 356 39 257 530469 415368 326 290 229 388 340 299 263 205 .481 .47 362 315 275239 183 182 160 140 163 141 23 145 125 108 116 099 084 135094066 112 076 1052 098 061 .040 .078 049 032 065 040 .025 17 1853 728 .623 534 1.458 394 844 714 .605513436 371 1.836 700 587494 .416 350 828 686 570 475396 1396 331 1.820 673 554 456 377312 339 1292 37 270 296 .250 276 1232 258 .215 252 231 212 194 178 .218 198 180 .164 .149 163 146 130 116 104 123 107 093 .07] 054 108 093 080 .060 .045 .095 .081069 .051,038 .083 .070 .060 .043 .03] 073 .06] 051 .037026 032 .026 021 017 014 .019 015 .012 .009 007 25 | 30 780 .610 .478 375 .295 233 742 552 412 308 .231 174 184 146 16 131 099 .075 .092 057 059 033 038 .030 024 2016 .010 .005 002 020 015 2012 007 .004 002 001 Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g. year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 2 3 4 5 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 7 8 9 10 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 6 .728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 12 13 14 15 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 17 18 19 20 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.2017.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778