ABC has a 6% cost of capital. The firm decides to invest in equipment that costs $250,000. ABC, Inc. forecasts that the project will generate $33,000 of annual cash inflow in each of the next eleven years.

ABC, Inc. also presents the following present value of 1 table factors for a 6% interest rate for time periods 1-11:

Period	Table Factor
1	.94340
2	1.83339
3	2.67301
4	3.46511
5	4.21236
6	4.91732
7	5.58238
8	6.20979
9	6.80169
10	7.36009
11	7.88687

Required:

• Using Excel formulas, compute the projects net present value.
• State the reason why ABC, Inc. should make or not make the investment.
• Use sensitivity analysis to determine:
  • The maximum hurdle rate that could exist before ABC, Inc. rejects the investment.
  • The minimum annual cash flow that ABC could generate and still invest in the project.
  • The minimum number of years that Orange County could generate a $33,000 annuity and still invest in the project.