Briet Exereise 12-23 Net Present Value E Snow Inc has just completed development of a new cell phone. The new product is expected to prodace annual revenues of $1.400,000. Producing the cell phone requires an investment in costing $1,500,000. The cell phone has a projected life cycle of 5 years. After 5 years, the equipment can be sold for S180,000. Working capital is also expected to increase by$200.000, which Snow will recover by the end of the new product's life cycle. Annual cash operating expenses are estimated at $820,000. The required rate of return is 89%. Required 1. Prepare a schedule of the projected annual cash flows. 2. Calculate the NPV using only discount factors from Exhibit 12B.1 (p. 670). 3. Calculate the NPV using discount factors from both Exhibits 12B. 1 and 12B.2 (p.671). nA 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 10% 18% 20% 25% 1 0.99010 0.98039 0.97087 0.96154 0.95238 0.94 340 093458 092593 091743 0.90009 OH9286 0.R7719 0.86207 084746 085331 osono or 30 0.96117 0.94260 .92456 0.90703 0.89000 0.87344 0.85734 0.841 68 0.82645 079719 076047 074316 01818 069444 00000 3 09/059 0.94232 091514 0 88900 086384 0.83962 0.81630 0.79383 0.77218 075131 0.71178 0.67497 0.64066 040853 0.96098 0.92385 0.88849 0.85480 0.82270 0.79209 0.26290 0.73503 0.20843 0.68301 063552 09208 055229 051579 0.48225 040560 0 95147 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0s8058 0.64993 062092 0.56743 0.51937 0.47611 0 43711 040188 0 32 6 0.9420s o.88797 083748 0.79031 0.74622 0.70496 066634 0,63017 o59627 0.36447 0.50663 0455S9 041044 0.37043 033400 026214 0 0 32764 0.2011 7 0.93272 0.87056 0.81309 0.75 0.71068 0.65506 0.62275 0.58349 0.54703 0.51316 0.45235 8 0.92348 0.85349 0.78941 0,73069 0.67684 0.62741 0.58201 0.54027 0.50187 046651 0.40388 0.35056 0.3050 0.26604 023237 0.16777 0.12259 03964 0.35383 9 0.91434 0.83676 0.76642 0.70259 0.64461 0.59190 0.34393 10 0.90529 0.82035 0.74409 0.67556 0.61391 0.55839 0,50835 0.46319 11 0.89632 0.80426 0.72242 0.64958 0.58468 0.52679 047509 0.42888 0.387s o35049 0.28748 O23562 O39S42 0.16192 0.ss9 oossro assa 12 0.88745 0.78849 0.70138 0.62460 0.55684 0.49697 044401 0.39711 0.35553 0.31863 0.25648 0.20756 016846 0.13722 0.11216 0.06832 04292 13 0.87866 0.77303 0.68095 0.60057 0.53032 0.46884 o.4 1496 036770 0.32618 028966 012917 1820, 0.14523 1629 000146 see 14 0.86996 075788 0.66112 0.57748 0.50507 0,44230 0.38782 0.34046 0.29925 0.26333 0.20462 0.15971 0.12520 0.09855 007789 0.04398 002540 15 0.86135 0.74301 0.64186 0.55526 0.48102 0.41/27 0.36245 0.31524 027454 0.23939 0182/0 0.14010 0.1093 0,08352 006491 0.03518 09195 16 0.85282 0.72845 0.62317 053391 0.45811 0.39365 0.33873 0.29189 0.25187 021763 0.16312 0,12289 0,09304 0.07078 0.034o 0.015 0.01503 17 0.84438 0.71416 060502 0.51337 0.43630 0371 36 0.31657 027027 023107 0.19784 014S64 .10780 00e021 00s006 aoso, onate osus 18 0.83602 0.70016 0.58739 0.4 001083 aat 19 0.82774 0.68643 0.57029 0.47464 0.39573 0.330S1 027651 023171 0.19449 0.16351 0.11611 0.08295 0.05139 0.04308 0.03130 0.01441 0.00684 20 0.81954 0.67297 0.55368 0.45639 0.37689 0.31180 0.2 21 0.81 22 0.80 71 018394 0.15018 0.12285 0.0s 0.50025 0.46043 0.42410 0.3061 0.30751 0 26295 022546 0.19381 013422 0.09430 0.42241 0,38554 0.32197 0.26974 0.22668 0.19106 0.16151 0.10737 0.0254 9363 0.41552 0.35034 0.29586 025025 0.21199 0.17986 0.13004 0.09456 0.06914 5B42 0.21455 0.17843 0.14864 0.10367 o.07276 0,05139 0.03651 0.02608 0.011 16 0.24151 0.19866 0.16370 0.13513 009256 0.06383 004430 0.03094 0 02174 0.00922 0.00405 0.00738 0.00311 003292 0.02222 0.01509 000590 0.00239 0.13513 0092 1143 0.65978 0.53755 0.43883 0.35894 0.29416 340 0.64684 0.52189 0.42196 0.34185 0.27751 0.225 8394 0.15018 0.12285 0.08264 0.05599 0.03819 0.02622 0.01811 0.12640 0.10153 0.06588 004308 0.02838 0.01883 0.01258 0.00472 0.00184 0.09230 0.05882 0.03779 002447 0.01596 0.01048 000378 0.00142 23 0.79544 0.63416 0.50669 0.40573 032557 0.26180 0.21095 0.17032 0.13778 0.11168 0.07379 0.04911 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 25 0.77977 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0 26 0.77205 0.59758 0.46369 0.36069 0.28124 0.21981 0.17220 0.13520 0.10639 0.08391 0.05252 003315 0.02109 0.01352 0.00874 o 27 0.76440 0.58586 0.45019 0.34682 0 26785 0.20737 0.16093 0.12519 0.09761 0.07628 004689 0.02908 0.01818 0.01146 000728 0.00242 0.0004 28 0.75684 0.57437 0.43708 0.33348 025509 0.19563 0.15040 0.11591 00B955 0.06934 .04 187 0025si 001s67 0.009,1 ono601 ooo191 050065 29 0.74934 0.56311 0.42435 0.32065 0.24295 0.18456 0.14056 0.10733 0.08215 0.06304 0.03738 002237 001351 000823 0.00506 001ss 0.00050 .30302 00 30 0.74192 0.55207 0.41199 0.30832 0.23138 0.17411 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