Cury 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 Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements X 1 i Data Table Year 1 $ 260,000 Year 2 250,000 Year 3 224,000 Year 4 210,000 Year 5 205,000 Year 6 178,000 Print Done Reference Present Value of $1 Periods 1 2 3 8% 0.926 0.857 0.794 0.735 0.681 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 5 6 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 7 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 5% 6% 0.952 0.943 0.907 0.890 0.864 0.840 0.823 0.792 0.784 0.747 0.746 0.705 0.711 0.665 0.677 0.627 0.645 0.592 0.614 0.558 0,585 0.527 0.557 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.458 0.394 0.436 0.371 0.416 0.350 0.396 0.331 0.377 0.312 1% 2% 3% 0.990 0.980 0.971 0.962 0.980 0.961 0.943 0.925 0.971 0.942 0.915 0.889 0.961 0.924 0.888 0.855 0.951 0.906 0.863 0.822 0.942 0.888 0.837 0.790 0.933 0.871 0.813 0.760 0.923 0.853 0.789 0.731 0.914 0.837 0.766 0.703 0.905 0.820 0.744 0.676 0.896 0.804 0.722 0.650 0.887 0.788 0.701 0.625 0.879 0.773 0.681 0.601 0.870 0.758 0.661 0.577 0.861 0.743 0.642 0.555 0.853 0.728 0.623 0.534 0.844 0.714 0.605 0.513 0.836 0.700 0.587 0.494 0.828 0.686 0.570 0.475 0.820 0.673 0.554 0.456 9% 10% 0.917 0.909 0.842 0.826 0.772 0.751 0.708 0.683 0.650 0.621 0.596 0.564 0.547 0.513 0.502 0.467 0.460 0.424 0.422 0.386 0.388 0.350 0.356 0.319 0.326 0.290 0.299 0.263 0.275 0.239 8 0.630 0.583 0.540 0.500 0.463 0.456 0.400 0.351 0.308 0.270 9 10 18% 20% 0.847 0.833 0.718 0.694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 0.162 0.135 0.137 0.112 0.116 0.093 0.099 0.078 0.084 0.065 0.071 0.054 0.060 0.045 0.051 0.038 0.043 0.031 0.037 0.026 11 12 13 14 15 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.429 0.397 0.368 0.340 0.315 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 16 17 18 19 20 0.339 0.317 0.296 0.277 0.258 0.292 0.270 0.250 0.232 0.215 0.252 0.231 0.212 0.194 0.178 0.218 0.198 0.180 0.164 0.149 Print Done any Reference Periods 12% 1 2 4 ch 6 7 8 9 10 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 12.134 11.348 10.6359.986 9.394 8.853 8.358 7.9047.487 7.103 6.424 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 14.718 13.578 12.561 11.652 10.838 10.1069.447 8.851 8.313 7.824 6.974 15.562 14.292 13.166 12.166 1127410.4779.763 9.122 8.544 8.022 7.120 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 17.226 15.678 14.32413.134 12.085 11.15810.336 9.604 8.950 8.365 7.366 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.514 7.469 14% 15% 16% 18% 20% 0.877 0.870 0.862 0.847 0.833 1.647 1.626 1.605 1.566 1.528 2.322 2.283 2.246 2.174 2.106 2.914 2.855 2.798 2.690 2.589 3.433 3.352 3.274 3.127 2.991 3.889 3.784 3.685 3.498 3.326 4.288 4.160 4.039 3.812 3.605 4.639 4.487 4.344 4.078 3.837 4.946 4.772 4.607 4.303 4.031 5.216 5.019 4.833 4.494 4.192 5.453 5.234 5.029 4.656 4.327 5.660 5.421 5.197 4.793 4.439 5.842 5.583 5.342 4.910 4.533 6.002 5.724 5.468 5.008 4.611 6.142 5.847 5.575 5.092 4.675 6.265 5.954 5.669 5.162 4.730 6.373 6.047 5.749 5.222 4.775 6.467 6.128 5.818 5.273 4.812 6.550 6.198 5.877 5.316 4.844 6.623 6.259 5.929 5.353 4.870 11 12 13 14 15 16 17 18 19 20 ny Print Done Requirements 1. Compute this project's NPV using Cury's 14% hurdle rate. Should Cury invest in the equipment? 2. Cury could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $73,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Cury invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done Requirement 1. Compute this project's NPV using Cury's 14% hurdle rate. Should Cury invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XX. Use parentheses or a minus sign for a negative not present value.) Net Cash PV Factor Present Years Inflow 14%) Value Present value of each year's inflow: (n = 1) In=2) 3 (n = 31 1 2 4 5 6 Total PV of cash inflows Initial investment 0 Not present value of the project Cury Industries invest in the equipment Requirement 2. Cury could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $73,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Cury invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, XXXX. Use parentheses or a minus sign for cash outflows and for a negative net present value.) Cash PV Factor Present (outflow linflow Value Refurbishment at the end of Year 6 in 6) Cash inflows in Year 7 in 7) Residual value (n 7) le es Net prosent value of the refurbishment beso The refurbishment provides a NPV. The refurbishment NPV is M to overcome the original NPV of the equipment. Therefore, the refurbishment alter Cury Industries' original decision regarding the equipment investment. Requirement 2. Cury could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $73,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Cury invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for cash outflows and for a negative net present value.) Cash PV Factor Present (outflowinflow (i = 14%) Value Refurbishment at the end of Year 6 (n=6) Cash inflows in Year 7 (n = 7) Residual value (n=7) Net prosent value of the refurbishment e so The refurbishment provides a refurbishment alt VNPV. The refurbishment NPV is V to overcome the original NPV of the equipment. Therefore, the original decision regarding the equipment investment negative positive ontinue to the next question Enter any number in the edit es Requirement 2. Cury could refurbish the oquipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $73,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Cury invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, Xxxx. Use parentheses or a minus sign for cash outflows and for a negative net present value.) teso Present Cash (outflow)linflow PV Factor (14%) Value esc Refurbishment at the end of Year 6 (n = 6) Cash inflows in Year 7 (n=7) Residual value (n7) Not present value of the refurbishment e scor to overcome the original NPV of the equipment. Therefore, the The refurbishment provides a NPV. The refurbishment NPV is refurbishment alter Cury Industries' original decision regardin ht. Enter any number in the edit fields and then continue to the next quot large enough not large enough les Requirement 2. Cury could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $73,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Cury invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, X.XXX. Uso parentheses or a minus sign for cash outflows and for a negative net present value.) esc Present Cash (outflow linflow PV Factor (1 = 14%) Value e sco Refurbishment at the end of Year 6 (n=6) Cash inflows in Year 7 (n=7) esco Residual value (n=7) Net present value of the refurbishment e scor The refurbishment provides a NPV. The refurbishment NPV is to overcome the original NPV of the equipment. Therefore, the refurbishment alter Cury Industries' original decision regarding the equipment investment Enter any num should S and then continue to the next question. should not