a. Lakeside, Inc., is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year life and cost $210,000, with an estimated salvage value of $40,000. Lakesides cost of capital is 8%. Table 6-4 and Table 6-5. (Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals.)

Required: Calculate the net present value of the new production equipment.

b. Lakeside, Inc., is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year life and cost $210,000, with an estimated salvage value of $30,000. Lakesides cost of capital is 8%. Table 6-4 and Table 6-5. (Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals.)

Required:

Calculate the present value ratio of the new production equipment. (Round your answer to 2 decimal places.)

c. Lakeside, Inc., 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-year life and cost $450,000, with an estimated salvage value of $40,000. Lakesides cost of capital is 9%.

Calculate the payback period and the accounting rate of return for the new production equipment. (Round your answers to 2 decimal places.)

Table 6-4 Factors for Calculating the Present Value of $1 Discount Rate Periods 2% 4% 6% 8% 10% 1 2% 14% 1 6% 18% 20% 0.980 0.9615 0.9434 0.9259 0.9091 0.8929 0.8772 0.8621 0.8475 0.8333 0.961 0.9246 0.8900 0.85730.8264 0.7972 0.7695 0.7432 0.7182 0.6944 0.942 0.8890 0.8396 0.7938 0.7513 0.7118 0.6750 0.6407 0.6086 0.5787 0.924 0.8548 .0.7921 0.7350 0.6830 0.6355 0.5921 0.5523 0.5158 0.4823 0.906 0.8219 0.7473 0.6806 0.6209 0.5674 0.5194 0.4761 0.4371 0.4019 0.888 0.7903 0.7050 0.6302 0.5645 0.5066 0.4556 0.4104 0.3704 0.3349 0.871 0.7599 0.6651 0.5835 0.5132 0.4523 0.3996 0.3538 0.3139 0.2791 0.853 0.7307 0.6274 0.5403 0.4665 0.4039 0.3506 0.3050 0.2660 0.2326 0.8370.7026 0.5919 0.5002 0.4241 0.3606 0.3075 0.2630 0.2255 0.1938 0.820 0.6756 0.5584 0.4632 0.3855 0.3220 0.26970.2267 0.1911 0.1615 0.804 0.6496 0.5268 0.4289 0.3505 0.2875 0.2366 0.1954 0.1619 0.1346 0.788 0.6246 0.4970 0.3971 0.3186 0.2567 0.2076 0.1685 0.1372 0.1122 0.773 0.6006 0.4688 0.3677 0.2897 0.2292 0.1821 0.1452 0.1163 0.0935 0.758 0.5775 0.4423 0.3405 0.2633 0.2046 0.1597 0.1252 0.0985 0.0779 0.743 0.5553 0.4173 0.3152 0.2394 0.1827 0.1401 0.10790.0835 0.0649 0.728 0.5339 0.3936 0.2919 0.2176 0.16310.1229 0.0930 0.0708 0.0541 0.714 0.5134 0.3714 0.2703 0.1978 0.1456 0.1078 0.0802 0.0600 0.0451 0.700 0.4936 0.3503 0.2502 0.1799 0.1300 0.0946 0.0691 0.0508 0.0376 0.686 0.4746 0.3305 0.23170.1635 0.1161 0.0829 0.0596 0.04310.0313 0.673 0.4564 0.3118 0.2145 0.1486 0.1037 0.0728 0.0514 0.0365 0.0261 0.660 0.4388 0.2942 0.19870.1351 0.0926 0.0638 0.0443 0.0309 0.0217 0.6470.4220 0.2775 0.1839 0.1228 0.0826 0.0560 0.0382 0.0262 0.0181 0.634 0.4057 0.2618 0.1703 0.1117 0.0738 0.0491 0.0329 0.0222 0.0151 0.622 0.3901 0.2470 0.15770.1015 0.0659 0.0431 0.0284 0.0188 0.0126 0.610 0.3751 0.2330 0.1460 0.0923 0.0588 0.0378 0.0245 0.0160 0.0105 0.552 0.3083 0.1741 0.0994 0.0573 0.0334 0.0196 0.0116 0.0070 0.0042 0.500 0.2534 0.1301 0.0676 0.0356 0.0189 0.0102 0.0055 0.0030 0.0017 0.453 0.2083 0.0972 0.0460 0.0221 0.01070.0053 0.0026 0.0013 0.0007 0.410 0.1712 0.0727 0.0313 0.0137 0.0061 0.00270.0013 0.0006 0.0003 0.372 0.1407 0.0543 0.0213 0.0085 0.0035 0.0014 0.0006 0.0003 0.0001 2 3 6 7 10 13 14 19 20 23 24 25 30 35 40 45 50