Basic Concepts Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,293,200. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows: Year Cash Revenues Cash Expenses 1 $2,981,160 $2,293,200 2 2,981,160 2,293,200 3 2,981,160 2,293,200 4 2,981,160 5 2,981,160 2,293,200 2,293,200 The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Compute the project's payback period. If required, round your answer to two decimal places. 3.33 years 2. Compute the project's accounting rate of return. Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 10% 3. Compute the project's net present value, assuming a required rate of return of 10 percent. When required, round your answer to the nearest dollar. 314,856 4. Compute the project's internal rate of return. Enter your answers as whole percentage values (for example, 16% should be entered as "16" in the answer box). Between % and % EXHIBIT 19B.2 Present Value of an Annuity of $1 in Arrears* Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% -234567890123AERTSOA222222222 0.980 0.962 0.943 0.926 1.942 1.866 1.833 2.884 2.775 2.673 0.909 1.783 1.736 2.577 2.487 0.893 1.690 2.402 0.877 0.862 1.647 1.605 2.322 2.246 11 3.808 3.630 4.713 4.452 4.212 5.601 5.242 4.917 6.472 6.002 5.582 7.325 6.733 6.210 8.162 7.435 6.802 8.983 8.111 7.360 9.787 8.760 7.887 10.575 9.385 8.384 11.348 9.986 8.853 12.106 10.563 9.295 8.244 7.367 12.849 11.118 9.712 8.559 7.606 13.578 11.652 10.106 8.851 7.824 14.292 12.166 10.477 9.122 8.022 14.992 12.659 10.828 9.372 8.201 15.678 13.134 11.158 9.604 8.365 16.351 13.590 11.470 9.818 8.514 17.011 14.029 11.764 10.017 8.649 17.658 14.451 12.042 10.201 18.292 14.857 12.303 10.371 18.914 15.247 12.550 10.529 3.465 3.312 3.170 3.993 3.791 4.623 4.355 3.037 2.914 2.798 0.847 1.566 2.174 2.690 3.605 3.433 3.274 3.127 4.111 5.206 4.868 4.564 5.747 5.335 4.968 3.889 3.685 4.288 4.039 4.639 4.344 6.247 5.759 6.710 6.145 7.139 6.495 5.328 4.946 4.607 5.650 5.216 4.833 3.498 3.812 3.078 4.303 4.494 5.938 5.453 5.029 7.536 6.814 6.194 5.660 5.197 7.904 7.103 6.424 6.628 6.811 5.842 5.342 6.002 5.468 6.142 5.575 6.974 6.265 5.668 7.120 6.373 5.749 5.222 7.250 6.467 5.818 7.366 6.550 5.877 7.469 6.623 5.929 7.562 6.687 5.973 5.273 5.316 5.353 5.384 8.772 7.645 6.743 6.011 5.410 8.883 7.718 6.792 6.044 5.432 4.925 4.499 4.137 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.714 1.528 1.492 1.457 1.424 1.392 1.361 1.331 1.224 2.106 2.042 1.981 1.923 1.868. 1.816 1.766 1.589 2.589 2.494 2.404 2.320 2.241 2.166 2.096 1.849 2.991 2.864 2.745 2.635 2.532 2.436 2.345 2.035 3.326 3.167 3.020 2.885 2.759 2.643 2.534 2.168 3.605 3.416 3.242 3.083 2.937 2.802 2.677 2.263 3.837 3.619 3.421 3.241 3.076 2.925 2.786 2.331 4.031 3.786 3.566 3.366 3.184 3.019 2.868 2.379 4.192 3.923 3.682 3.465 3.269 3.092 2.930 2.414 4.656 4.327 4.035 3.776 3.543 3.335 3.147 4.793 4.439 4.127 3.851 3.606 3.387 3.190 4.910 4.533 4.203 3.912 3.656 3.427 5.008 4.611 4.265 3.962 3.695 5.092 4.675 4.315 4.001 3.726 2.484 5.162 4.730 4.357 4.033 3.751 3.503 3.283 3.088 2.489 4.775 4.391 4.059 3.771 3.518 3.295 3.097 2.492 4.812 4.419 4.080 3.786 3.529 3.304 3.104 2.494 4.843 4.442 4.097 3.799 3.539 3.311 3.109 2.496 4.870 4.460 4.110 3.808 3.546 3.316 3.113 2.497 4.891 4.476 4.121 3.816 3.551 3.320 3.116 2.498 4.909 4.488 4.130 3.822 3.323 3.118 2.498 3.325 3.120 2.499 2.978 2.438 3.013 2.456 3.223 3.040 2.469 3.459 3.249 3.061 2.478 3.483 3.268 3.076 3.556 3.827 3.559 8.985 7.784 6.835 6.073 5.451 19.523 15.622 12.783 10.675 9.077 7.843 6.873 6.097 20.121 15.983 13.003 10.810 9.161 7.896 6.906 6.118 20.707 16.330 13.211 10.935 9.237 7.943 6.935 6.136 21.281 16.663 13.406 11.051 9.307 7.984 6.961 6.152 21.844 16.984 13.591 11.158 9.370 8.022 6.983 6.166 22.396 17.292 13.765 11.258 9.427 8.055 7.003 6.177 4.937 4.507 4.143 3.831 3.562 3.327 3.121 2.499 5.467 4.948 4.514 4.147 3.834 3.564 3.329 3.122 2.499 5.480 4.956 4.520 4.151 3.837 3.566 3.330 3.123 2.500 5.492 4.964 4.524 4.154 3.839 3.567 3.331 3.123 2.500 5.502 4.970 4.528 4.157 3.840 3.568 3.331 3.124 2.500 5.510 4.975 4.531 4.159 3.841 3.569 3.332 3.124 2.500 5.517 4.979 4.534 4.160 3.842 3.569 3.332 3.124 2.500 *P = (1/i) [1-1/(1+i)']. EXHIBIT 19B.1 Present Value of $1* Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% 1234567 0.980 0.962 0.961 0.925 0.888 0.871 8 0.853 0.731 9 0.837 10 0.820 11 0.804 0.540 0.703 0.592 0.500 0.676 0.650 0.943 0.926 0.909 0.893 0.890 0.857 0.826 0.797 0.942 0.889 0.840 0.794 0.751 0.712 0.924 0.855 0.792 0.735 0.683 0.906 0.822 0.747 0.681 0.621 0.790 0.705 0.760 0.665 0.583 0.627 0.877 0.769 0.675 0.636 0.567 0.636 0.564 0.507 0.513 0.467 0.558 0.463 0.527 0.429 0.227 0.237 0.195 0.162 12 0.788 0.625 0.497 0.397 0.319 0.257 0.208 0.168 0.137 13 0.773 0.601 0.469 0.368 0.290 0.229 14 0.758 0.577 0.442 0.340 0.263 0.205 0.116 0.125 0.099 15 0.743 0.555 0.417 0.315 0.239 0.183 16 0.728 0.534 0.394 0.292 0.218 0.163 0.093 0.071 17 0.714 0.513 0.371 18 0.700 0.494 0.051 19 0.686 0.475 20 0.673 0.456 21 0.660 0.439 22 0.647 23 24 0.622 0.390 0.247 25 0.610 0.375 0.233 0.038 0.024 0.016 26 0.598 0.033 0.021 0.014 27 0.029 0.018 0.011 28 29 30 0.552 0.308 0.174 0.099 0.026 0.016 0.010 0.022 0.014 0.008 0.020 0.012 0.007 0.099 0.085 0.073 0.062 0.035 0.079 0.066 0.056 0.046 0.025 0.062 0.052 0.043 0.036 0.018 0.182 0.145 0.061 0.050 0.040 0.033 0.027 0.013 0.160 0.049 0.039 0.032 0.025 0.021 0.009 0.140 0.108 0.084 0.051 0.040 0.031 0.025 0.020 0.016 0.123 0.042 0.032 0.025 0.019 0.015 0.270 0.198 0.146 0.108 0.080 0.034 0.026 0.020 0.015 0.012 0.009 0.350 0.250 0.180 0.130 0.095 0.069 0.021 0.016 0.012 0.009 0.007 0.002 0.331 0.232 0.164 0.116 0.083 0.060 0.043 0.031 0.023 0.017 0.012 0.009 0.007 0.005 0.002 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.019 0.014 0.010 0.007 0.005 0.004 0.001 0.294 0.199 0.135 0.093 0.064 0.044 0.031 0.022 0.015 0.011 0.008 0.006 0.004 0.003 0.001 0.422 0.278 0.184 0.123 0.083 0.056 0.038 0.026 0.018 0.013 0.009 0.006 0.004 0.003 0.002 0.001 0.634 0.406 0.262 0.170 0.112 0.074 0.049 0.033 0.022 0.010 0.007 0.005 0.003 0.002 0.002 0.000 0.158 0.102 0.066 0.043 0.028 0.019 0.008 0.006 0.004 0.003 0.002 0.001 0.000 0.146 0.092 0.059 0.007 0.005 0.003 0.002 0.001 0.001 0.000 0.361 0.220 0.135 0.084 0.053 0.004 0.002 0.002 0.001 0.001 0.000 0.586 0.347 0.207 0.125 0.076 0.047 0.003 0.002 0.001 0.001 0.001 0.000 0.574 0.333 0.196 0.116 0.069 0.042 0.002 0.002 0.001 0.001 0.000 0.000 0.563 0.321 0.185 0.107 0.063 0.037 0.002 0.001 0.001 0.000 0.000 0.000 0.057 0.033 0.002 0.001 0.001 0.000 0.000 0.000 0.162 0.137 0.135 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.743 0.718 0.694 0.672 0.650 0.630 0.610 0.592 0.574 0.510 0.641 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.364 0.592 0.552 0.516 0.482 0.451 0.423 0.397 0.373 0.350 0.329 0.260 0.519 0.476 0.437 0.402 0.370 0.341 0.315 0.291 0.269 0.250 0.186 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.452 0.400 0.354 0.314 0.279 0.249 0.222 0.198 0.178 0.159 0.404 0.351 0.305 0.266 0.233 0.204 0.424 0.361 0.308 0.263 0.225 0.194 0.167 0.386 0.322 0.270 0.191 0.350 0.287 0.714 0.189 0.133 0.143 0.095 0.179 0.157 0.139 0.144 0.125 0.123 0.108 0.094 0.082 0.108 0.068 0.048 0.116 0.112 0.094 0.112 0.092 0.076 0.093 0.075 0.078 0.065 0.054 0.062 0.006 0.012 0.005 0.060 0.045 0.003 0.038 0.028 0.015 0.013 0.010 0.009 0.006 0.007 0.005 0.006 0.004 0.005 0.003 0.004 0.003 *P = A/(1 + i)".