Bevil Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $900,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view the present value table.) (Click the icon to view the present value annuity table.) (Click the icon to view the future value table.) (Click the icon to view the future value annuity table.) Read the requirements. Requirements 1. Compute this project's NPV using Bevil Industries' 16% hurdle rate. Should the company invest in the equipment? Why or why not? 2. Bevil Industries could refurbish the equipment at the end of six years for $102,000. The refurbished equipment could be used one more year, providing $74,000 of net cash inflows in Year 7 . In addition, the refurbished equipment would have a $50,000 residual value at the end of Year 7 . Should Bevil Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Data table Present Value of $1 \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.926 & 0.909 & 0.893 & 0.877 & 0.862 & 0.847 & 0.833 \\ Period 2 & 0.980 & 0.961 & 0.943 & 0.925 & 0.907 & 0.890 & 0.857 & 0.826 & 0.797 & 0.769 & 0.743 & 0.718 & 0.694 \\ Period 3 & 0.971 & 0.942 & 0.915 & 0.889 & 0.864 & 0.840 & 0.794 & 0.751 & 0.712 & 0.675 & 0.641 & 0.609 & 0.579 \\ Period 4 & 0.961 & 0.924 & 0.888 & 0.855 & 0.823 & 0.792 & 0.735 & 0.683 & 0.636 & 0.592 & 0.552 & 0.516 & 0.482 \\ Period 5 & 0.951 & 0.906 & 0.863 & 0.822 & 0.784 & 0.747 & 0.681 & 0.621 & 0.567 & 0.519 & 0.476 & 0.437 & 0.402 \\ Period 6 & 0.942 & 0.888 & 0.837 & 0.790 & 0.746 & 0.705 & 0.630 & 0.564 & 0.507 & 0.456 & 0.410 & 0.370 & 0.335 \\ Period 7 & 0.933 & 0.871 & 0.813 & 0.760 & 0.711 & 0.665 & 0.583 & 0.513 & 0.452 & 0.400 & 0.354 & 0.314 & 0.279 \\ Period 8 & 0.923 & 0.853 & 0.789 & 0.731 & 0.677 & 0.627 & 0.540 & 0.467 & 0.404 & 0.351 & 0.305 & 0.266 & 0.233 \\ Period 9 & 0.914 & 0.837 & 0.766 & 0.703 & 0.645 & 0.592 & 0.500 & 0.424 & 0.361 & 0.308 & 0.263 & 0.225 & 0.194 \\ Period 10 & 0.905 & 0.820 & 0.744 & 0.676 & 0.614 & 0.558 & 0.463 & 0.386 & 0.322 & 0.270 & 0.227 & 0.191 & 0.162 \\ Period 11 & 0.896 & 0.804 & 0.722 & 0.650 & 0.585 & 0.527 & 0.429 & 0.350 & 0.287 & 0.237 & 0.195 & 0.162 & 0.135 \\ Period 12 & 0.887 & 0.788 & 0.701 & 0.625 & 0.557 & 0.497 & 0.397 & 0.319 & 0.257 & 0.208 & 0.168 & 0.137 & 0.112 \\ Period 13 & 0.879 & 0.773 & 0.681 & 0.601 & 0.530 & 0.469 & 0.368 & 0.290 & 0.229 & 0.182 & 0.145 & 0.116 & 0.093 \\ Period 14 & 0.870 & 0.758 & 0.661 & 0.577 & 0.505 & 0.442 & 0.340 & 0.263 & 0.205 & 0.160 & 0.125 & 0.099 & 0.078 \\ Period 15 & 0.861 & 0.743 & 0.642 & 0.555 & 0.481 & 0.417 & 0.315 & 0.239 & 0.183 & 0.1 \end{tabular} Present Value of Annuity of $1 Future Value of Annuity of $1 \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & \\ \hline Period 1 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 \\ Period 2 & 2.010 & 2.020 & 2.030 & 2.040 & 2.050 & 2.060 & 2.080 & 2.100 & 2.120 & 2.140 & 2.160 & 2.180 \\ Period 3 & 3.030 & 3.060 & 3.091 & 3.122 & 3.153 & 3.184 & 3.246 & 3.310 & 3.374 & 3.440 & 3.506 & 3.572 \\ Period 4 & 4.060 & 4.122 & 4.184 & 4.246 & 4.310 & 4.375 & 4.506 & 4.641 & 4.779 & 4.921 & 5.066 & 5.215 \\ Period 5 & 5.101 & 5.204 & 5.309 & 5.416 & 5.526 & 5.637 & 5.867 & 6.105 & 6.353 & 6.610 & 6.877 & 7.154 \\ Period 6 & 6.152 & 6.308 & 6.468 & 6.633 & 6.802 & 6.975 & 7.336 & 7.716 & 8.115 & 8.536 & 8.977 & 9.442 \\ Period 7 & 7.214 & 7.434 & 7.662 & 7.898 & 8.142 & 8.394 & 8.923 & 9.487 & 10.089 & 10.730 & 11.414 & 12.142 \\ Period 8 & 8.286 & 8.583 & 8.892 & 9.214 & 9.549 & 9.897 & 10.637 & 11.436 & 12.300 & 13.233 & 14.240 & 15.327 \\ Period 9 & 9.369 & 9.755 & 10.159 & 10.583 & 11.027 & 11.491 & 12.488 & 13.579 & 14.776 & 16.085 & 17.519 & 19.086 \\ Period 10 & 10.462 & 10.950 & 11.464 & 12.006 & 12.578 & 13.181 & 14.487 & 15.937 & 17.549 & 19.337 & 21.321 & 23.521 \\ Period 11 & 11.567 & 12.169 & 12.808 & 13.486 & 14.207 & 14.972 & 16.645 & 18.531 & 20.655 & 23.045 & 25.733 & 28.755 & : \\ Period 12 & 12.683 & 13.412 & 14.192 & 15.026 & 15.917 & 16.870 & 18.977 & 21.384 & 24.133 & 27.271 & 30.850 & 34.931 & ; \\ Period 13 & 13.809 & 14.680 & 15.618 & 16.627 & 17.713 & 18.882 & 21.495 & 24.523 & 28.029 & 32.089 & 36.786 & 42.219 & ; \\ Period 14 & 14.947 & 15.974 & 17.086 & 18.292 & 19.599 & 21.015 & 24.215 & 27.975 & 32.393 & 37.581 & 43.672 & 50.818 \\ Period 15 & 16.097 & 17.293 & 18.599 & 20.024 & 21.579 & 23.276 & 27.152 & 31.772 & 37.280 & 43.842 & 51.660 & \end{tabular} Print Done