Cowboy Recording Studio is considering the Investment of $143,600 in a new recording equipment. It is estimated that the new equipment will generate additional cash flow of $21,000 per year for each year of its 7-year life and will have a salvage value of $14,500 at the end of its life. Cowboys's financial managers estimate that the firm's cost of capital is 10%. Use Table 6- 4 and Table 6-5. (Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals.) TABLE 6.4 FACTORS FOR CALCULATING THE PRESENT VALUE OF $1 Discount Rate No. of Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2. 3 4 5 0.980 0.961 0.942 0.924 0.906 0.9615 0.9246 0.8890 0.8548 0.8219 0.9434 0.8900 0.8396 0.7921 0.7473 0.9259 0.8573 0.7938 0.7350 0.6806 0.9091 0.8264 0.7513 0.6830 0.6209 0.8929 0.7972 0.7118 0.6355 0.5674 0.8772 0.7695 0.6750 0.5921 0.5194 0.8621 0.7432 0.6407 0.5523 0.4761 0.8475 0.7182 0.6086 0.5158 0.4371 0.8333 0.6944 0.5787 0.4823 0.4019 6 7 8 9 10 0.888 0.871 0.853 0.837 0.820 0.7903 0.7599 0.7307 0.7026 0.6756 0.7050 0.6651 0.6274 0.5919 0.5584 0.6302 0.5835 0.5403 0.5002 0.4632 0.5645 0.5132 0.4665 0.4241 0.3855 0.5066 0.4523 0.4039 0.3606 0.3220 0.4556 0.3996 0.3506 0.3075 0.2697 0.4104 0.3538 0.3050 0.2630 0.2267 0.3704 0.3139 0.2660 0.2255 0.1911 0.3349 0.2791 0.2326 0.1938 0.1615 11 12 13 14 15 0.804 0.788 0.773 0.758 0.743 0.6496 0.6246 0.6006 0.5775 0.5553 0.5268 0.4970 0.4688 0.4423 0.4173 0.4289 0.3971 0.3677 0.3405 0.3152 0.3505 0.3186 0.2897 0.2633 0.2394 0.2875 0.2567 0.2292 0.2046 0.1827 0.2366 0.2076 0.1821 0.1597 0.1401 0.1954 0.1685 0.1452 0.1252 0.1079 0.1619 0.1372 0.1163 0.0985 0.0835 0.1346 0.1122 0.0935 0.0779 0.0649 16 17 18 19 20 0.728 0.714 0.700 0.686 0.673 0.5339 0.5134 0.4936 0.4746 0.4564 0.3936 0.3714 0.3503 0.3305 0.3118 0.2919 0.2703 0.2502 0.2317 0.2145 0.2176 0.1978 0.1799 0.1635 0.1486 0.1631 0.1456 0.1300 0.1161 0.1037 0.1229 0.1078 0.0946 0.0829 0.0728 0.0930 0.0802 0.0691 0.0596 0.0514 0.0708 0.0600 0.0508 0.0431 0.0365 0.0541 0.0451 0.0376 0.0313 0.0261 21 22 23 24 25 0.660 0.647 0.634 0.622 0.610 0.4388 0.4220 0.4057 0.3901 0.3751 0.2942 0.2775 0.2618 0.2470 0.2330 0.1987 0.1839 0.1703 0.1577 0.1460 0.1351 0.1228 0.1117 0.1015 0.0923 0.0926 0.0826 0.0738 0.0659 0.0588 0.0638 0.0560 0.0491 0.0431 0.0378 0.0443 0.0382 0.0329 0.0284 0.0245 0.0309 0.0262 0.0222 0.0188 0.0160 0.0217 0.0181 0.0151 0.0126 0.0105 30 35 40 45 50 0.552 0.500 0.453 0.410 0.372 0.3083 0.2534 0.2083 0.1712 0.1407 0.1741 0.1301 0.0972 0.0727 0.0543 0.0994 0.0676 0.0460 0.0313 0.0213 0.0573 0.0356 0.0221 0.0137 0.0085 0.0334 0.0189 0.0107 0.0061 0.0035 0.0196 0.0102 0.0053 0.0027 0.0014 0.0116 0.0055 0.0026 0.0013 0.0006 0.0070 0.0030 0.0013 0.0006 0.0003 0.0042 0.0017 0.0007 0.0003 0.0001 TABLE 6.5 FACTORS FOR CALCULATING THE PRESENT VALUE OF AN ANNUITY OF $1 Discount Rate No. of Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 1 2. 3 4 5 0.980 1.942 2.884 3.808 4.713 0.9615 1.8861 2.7751 3.6299 4.4518 0.9434 1.8334 2.6730 3.4651 4.2124 0.9259 1.7833 2.5771 3.3121 3.9927 0.9091 1.7355 2.4869 3.1699 3.7908 0.8929 1.6901 2.4018 3.0373 3.6048 0.8772 1.6467 2.3216 2.9137 3.4331 0.8621 1.6052 2.2459 2.7982 3.2743 0.8475 1.5656 2.1743 2.6901 3.1272 0.8333 1.5278 2. 1065 2.5887 2.9906 6 7 8 9 10 5.601 5.2421 6.472 6.0021 7.325 6.7327 8.162 7.4353 8.983 8.1109 4.9173 5.5824 6.2098 6.8017 7.3601 4.6229 5.2064 5.7466 6.2469 6.7101 4.3553 4.8684 5.3349 5.7590 6.1446 4.1114 4.5638 4.9676 5.3282 5.6502 3.8887 4.2883 4.6389 4.9464 5.2161 3.6847 4.0386 4.3436 4.6065 4.8332 3.4976 3.8115 4.0776 4.3030 4.4941 3.3255 3.6046 3.8372 4.0310 4.1925 11 12 13 9.787 8.7605 10.575 9.3851 11.348 9.9856 12.106 10.5631 12.849 11.1184 7.8869 8.3838 8.8527 9.2950 9.7122 7.1390 7.5361 7.9038 8.2442 8.5595 6.4951 6.8137 7.1034 7.3667 7.6061 5.9377 6.1944 6.4235 6.6282 6.8109 5.4527 5.6603 5.8424 6.0021 6.1422 5.0286 5.1971 5.3423 5.4675 5.5755 4.6560 4.7932 4.9095 5.0081 5.0916 4.3271 4.4392 4.5327 4.6106 4.6755 14 15 16 17 18 19 20 13.578 11.6523 10.1059 14.292 12.1657 10.4773 14.992 12.6593 10.8276 15.678 13.1339 11.1581 16.351 13.5903 11.4699 8.8514 9.1216 9.3719 9.6036 9.8181 7.8237 8.0216 8.2014 8.3649 8.5136 6.9740 7.1196 7.2497 7.3658 7.4694 6.2651 6.3729 6.4674 6.5504 6.6231 5.6685 5.7487 5.8178 5.8775 5.9288 5.1624 5.2223 5.2732 5.3162 5.3527 4.7296 4.7746 4.8122 4.8435 4.8696 21 22 23 17.011 14.0292 11.7641 17.658 14.4511 12.0416 18.292 14.8568 12.3034 18.914 15.2470 12.5504 19.523 15.6221 12.7834 10.0168 10.2007 10.3711 10.5288 10.6748 8.6487 8.7715 8.8832 8.9847 9.0770 7.5620 7.6446 7.7184 7.7843 7.8431 6.6870 6.7429 6.7921 6.8351 6.8729 5.9731 6.0113 6.0442 6.0726 6.0971 5.3837 5.4099 5.4321 5.4509 5.4669 4.8913 4.9094 4.9245 4.9371 4.9476 24 25 30 35 40 45 50 22.396 17.2920 13.7648 11.2578 24.999 18.6646 14.4982 11.6546 27.355 19.7928 15.0463 11.9246 29.490 20.7200 15.4558 12.1084 31.424 21.4822 15.7619 12.2335 9.4269 9.6442 9.7791 9.8628 9.9148 8.0552 8.1755 8.2438 8.2825 8.3045 7.0027 7.0700 7.1050 7.1232 7.1327 6.1772 6.2153 6.2335 6.2421 6.2463 5.5168 5.5386 5.5482 5.5523 5.5541 4.9789 4.9915 4.9966 4.9986 4.9995 Required A Required B Required c Required D Calculate the net present value of the investment. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Net present value Required A Required B Required c Required D Calculate the present value ratio of the investment. (Round your answer to 2 decimal places.) Present value ratio Calculate the payback period of the investment. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Payback period years