Allegience Insurance Company's management is considering an advertising program that would require an initial expenditure of $195,290 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $93,000. with associated expenses of $34,000. The additional sales revenue and expenses from the advertising program are projected to increase by 10 percent each year. Allegience's tax rate is 30 percent. (Hint. The $195,290 advertising cost is an expense) Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the payback period for the advertising program. 2. Calculate the advertising program's net present value, assuming an after-tax hurdle rate of 10 percent. (Round your intermediate calculations and final answer to the nearest whole dollar.) Jack and Jill's Place is a nonprofit nursery school run by the parents of the enrolled children. Since the school is out of town, it has a well rather than a city water supply. Lately, the well has become unreliable, and the school has had to bring in bottled drinking water. The school's governing board is considering drilling a new well (at the top of the hill, naturally). The board estimates that a new well would cost $3,025 and save the school $580 annually for 10 years. The school's hurdle rate is 8 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Compute the new well's net present value. Should the governing board approve the new well? (Round your final answer to the nearest dollar amount.) Jack and Jill's Place is a nonprofit nursery school run by the parents of the enrolled children. Since the school is out of town, it has a well rather than a city water supply. Lately, the well has become unreliable, and the school has had to bring in bottled drinking water. The school's governing board is considering drilling a new well (at the top of the hill, naturally). The board estimates that a new well would cost $3,687 and save the school $600 annually for 10 years. The school's hurdle rate is 7 percent Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Compute the internal rate of return on the new well. Should the governing board approve the new well? Table I Future Value of $1.00(1+r)n \begin{tabular}{|cccccccc} \hline Period & 4% & 6% & 8% & 10% & 12% & 14% & 20% \\ \hline 1 & 1.040 & 1.060 & 1.080 & 1.100 & 1.120 & 1.140 & 1.200 \\ \hline 2 & 1.082 & 1.124 & 1.166 & 1.210 & 1.254 & 1.300 & 1.440 \\ \hline 3 & 1.125 & 1.191 & 1.260 & 1.331 & 1.405 & 1.482 & 1.728 \\ \hline 4 & 1.170 & 1.263 & 1.361 & 1.464 & 1.574 & 1.689 & 2.074 \\ \hline 5 & 1.217 & 1.338 & 1.469 & 1.611 & 1.762 & 1.925 & 2.488 \\ \hline 6 & 1.265 & 1.419 & 1.587 & 1.772 & 1.974 & 2.195 & 2.956 \\ \hline 7 & 1.316 & 1.504 & 1.714 & 1.949 & 2.211 & 2.502 & 3.583 \\ \hline 8 & 1.369 & 1.594 & 1.851 & 2.144 & 2.476 & 2.853 & 4.300 \\ \hline 9 & 1.423 & 1.690 & 1.999 & 2.359 & 2.773 & 3.252 & 5.160 \\ \hline 10 & 1.480 & 1.791 & 2.159 & 2.594 & 3.106 & 3.707 & 6.192 \\ \hline 11 & 1.540 & 1.898 & 2.332 & 2.853 & 3.479 & 4.226 & 7.430 \\ \hline \end{tabular} \begin{tabular}{cccccccc} 13 & 1.665 & 2.133 & 2.720 & 3.452 & 4.364 & 5.492 & 10.699 \\ 14 & 1.732 & 2.261 & 2.937 & 3.798 & 4.887 & 6.261 & 12.839 \\ 15 & 1.801 & 2.397 & 3.172 & 4.177 & 5.474 & 7.138 & 15.407 \\ \hline 20 & 2.191 & 3.207 & 4.661 & 6.728 & 9.646 & 13.743 & 38.338 \\ 30 & 3.243 & 5.744 & 10.063 & 17.450 & 29.960 & 50.950 & 237.380 \\ \hline 0 & 4.801 & 10.286 & 21.725 & 45.260 & 93.051 & 188.880 & 1.469.800 \end{tabular} (1+r)n1 \begin{tabular}{rrrrrrrr} \hline 20 & 29.778 & 36.778 & 45.762 & 57.276 & 75.052 & 91.025 & 186.690 \\ 30 & 56.085 & 79.058 & 113.283 & 164.496 & 241.330 & 356.790 & 1,181.900 \\ 40 & 95.026 & 154.762 & 259.057 & 442.597 & 767.090 & 1,342.000 & 7.343.900 \end{tabular} Dracant Valiea of \$100 1 \begin{tabular}{rrrrrrrrrrrrrrrrr} \hline 6 & .790 & .705 & .630 & .564 & .507 & .456 & .410 & .370 & .335 & .303 & .275 & .250 & .227 & .207 & .189 \\ 7 & .760 & .665 & .583 & .513 & .452 & .400 & .354 & .314 & .279 & .249 & .222 & .198 & .178 & .159 & .143 \\ 8 & .731 & .627 & .540 & .467 & .404 & .351 & .305 & .266 & .233 & .204 & .179 & .157 & .139 & .123 & .108 \\ \hline 9 & .703 & .592 & .500 & .424 & .361 & .308 & .263 & .225 & .194 & .167 & .144 & .125 & .108 & .094 & .082 \\ 10 & .676 & .558 & .463 & .386 & .322 & .270 & .227 & .191 & .162 & .137 & .116 & .099 & .085 & .073 & .062 \\ \hline 11 & .650 & .527 & .429 & .350 & .287 & .237 & .195 & .162 & .135 & .112 & .094 & .079 & .066 & .056 & .047 \\ 12 & .625 & .497 & .397 & .319 & .257 & .208 & .168 & .137 & .112 & .092 & .076 & .062 & .052 & .043 & .036 \\ 13 & .601 & .469 & .368 & .290 & .229 & .182 & .145 & .116 & .093 & .075 & .061 & .050 & .040 & .033 & .027 \\ 14 & .577 & .442 & .340 & .263 & .205 & .160 & .125 & .099 & .078 & .062 & .049 & .039 & .032 & .025 & .021 \\ 15 & .555 & .417 & .315 & .239 & .183 & .140 & .108 & .054 & .065 & .051 & .040 & .031 & .025 & .020 & .016 \\ \hline 20 & .456 & .312 & .215 & .149 & .104 & .073 & .051 & .037 & .026 & .019 & .014 & .010 & .007 & .005 \\ \hline 30 & 308 & .174 & .099 & .057 & .033 & .020 & .012 & .007 & .004 & .003 & .002 & .001 & .001 \\ \hline \end{tabular} r1(1(1+rn)1)