Antonio Melton, the chief executive officer of Rundle Corporation, has assembled his top advisers to evaluate an investment opportunity. The advisers expect the company to pay $410,000 cash at the beginning of the investment and the cash inflow for each of the following four years to be the following. Year 1 $93,000 Year 2 $106,000 Year 3 $122,000 Year 4 $193,000 Mr. Melton agrees with his advisers that the company should use a desired rate of return of 14 percent to compute net present value to evaluate the viability of the proposed project. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of the proposed project. Should Mr. Melton approve the project? b.&c. Shawn Love, one of the advisers, is wary of the cash flow forecast and she points out that the advisers failed to consider that the depreciation on equipment used in this project will be tax deductible. The depreciation is expected to be $82,000 per year for the four-year period. The company's income tax rate is 40 percent per year. Use this information to revise the company's expected cash flow from this project. Compute the net present value of the project based on the revised cash flow forecast. Should Mr. Melton approve the project? (For all requirements, Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar.) a. Net present value Should Mr. Melton approve the project? b.&c. Net present value Should Mr. Melton approve the project? 14% 12% 0.892857 1.690051 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 4% 5% 6% 7% 0.961538 0.952381 0.943396 0.934579 1.886095 1.859410 1.833393 1.808018 2.775091 2.723248 2.673012 2.624316 3.629895 3.545951 3.465106 3.387211 4.451822 4.329477 4.212364 4.100197 5.242137 5.075692 4.917324 4.766540 6.002055 5.786373 5.582381 5.389289 6.732745 6.463213 6.209794 5.971299 7.435332 7.107822 6.801692 6.515232 8.110896 7.721735 7.360087 7.023582 8.760477 8.306414 7.886875 7.498674 9.385074 8.863252 8.383844 7.942686 13 9.985648 9.393573 8.852683 8.357651 14 10.563123 9.898641 9.294984 8.745468 15 11.118387 10.379658 9.712249 9.107914 16 11.652296 10.837770 10.105895 9.446649 17 12.165669 11.274066 10.477260 9.763223 18 12.659297 11.689587 10.827603 10.059087 19 13.133939 12.085321 11.158116 10.335595 20 13.590326 12.462210 11.469921 10.594014 8% 9% 0.925926 0.917431 1.783265 1.759111 2.577097 2.531295 3.312127 3.239720 3.992710 3.889651 4.622880 4.485919 5.206370 5.032953 5.746639 5.534819 6.246888 5.995247 6.710081 6.417658 7.138964 6.805191 7.536078 7.160725 7.903776 7.486904 8.244237 7.786150 8.559479 8.060688 8.851369 8.312558 9.121638 8.543631 9.371887 8.755625 9.603599 8.905115 9.8181479.128546 10% 0.909091 1.735537 2.486852 3.169865 3.790787 4.355261 4.868419 5.334926 5.759024 6.144567 6.495061 6.813692 7.103356 7.366687 7.606080 7.823709 8.021553 8.201412 8.364920 8.513564 3.037349 3.604776 4.111407 4.563757 4.967640 5.328250 5.650223 5.937699 6.194374 6.423548 6.628168 6.810864 6.973986 7.119630 7.249670 7.365777 7.469444 16% 0.877193 0.862069 1.646661 1.605232 2.321632 2.245890 2.913712 2.798181 3.433081 3.274294 3.888668 3.684736 4.288305 4.038565 4.638864 4.343591 4.946372 4.606544 5.216116 4.833227 5.452733 5.028644 5.660292 5.197107 5.842362 5.342334 6.002072 5.467529 6.142168 5.575456 6.265060 5.668497 6.372859 5.748704 6.467420 5.817848 6.550369 5.877455 6.6231315.928841 20% 0.833333 1.527778 2.106481 2.588735 2.990612 3.325510 3.604592 3.837160 4.030967 4.192472 4.327060 4.439217 4.532681 4.610567 4.675473 4.729561 4.774634 4.812195 4.843496 4.869580 TABLE 1 PRESENT VALUE OF $1 n 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 20% 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 0.924556 0.907029 0.889996 0.873439 0.857339 0.841680 0.826446 0.797194 0.769468 0.743163 0.694444 3 0.888996 0.863838 0.839619 0.816298 0.793832 0.772183 0.751315 0.711780 0.674972 0.640658 0.578704 0.854804 0.822702 0.792094 0.762895 0.735030 0.708425 0.683013 0.635518 0.592080 0.552291 0.482253 0.821927 0.783526 0.747258 0.712986 0.680583 0.649931 0.620921 0.567427 0.519369 0.476113 0.401878 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.455587 0.410442 0.334898 7 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 0.513158 0.452349 0.399637 0.353830 0.279082 8 0.730690 0.676839 0.627412 0.582009 0.540269 0.501866 0.466507 0.403883 0.350559 0.305025 0.232568 9 0.702587 0.644609 0.591898 0.543934 0.500249 0.460428 0.424098 0.360610 0.307508 0.262953 0.193807 10 0.675564 0.613913 0.558395 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0.161506 11 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 0.350494 0.287476 0.236617 0.195417 0.134588 12 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.318631 0.256675 0.2075590.168463 0.112157 13 0.600574 0.530321 0.468839 0.414964 0.367698 0.326179 0.289664 0.229174 0.182069 0.145227 0.093464 14 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 0.263331 0.204620 0.159710 0.125195 0.077887 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.182696 0.140096 0.107927 0.064905 16 0.533908 0.458112 0.393646 0.338735 0.291890 0.251870 0.217629 0.163122 0.122892 0.093041 0.054088 17 0.513373 0.436297 0.371364 0.316574 0.270269 0.231073 0.197845 0.145644 0.107800 0.080207 0.045073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179859 0.130040 0.094561 0.069144 0.037561 19 0.474642 0.395734 0.330513 0.276508 0.231712 0.194490 0.163508 0.116107 0.082948 0.059607 0.031301 20 0.456387 0.376889 0.311805 0.258419 0.214548 0.178431 0.148644 0.103667 0.072762 0.051385 0.026084