Discount Rates, Automated Manufacturing, Competing Investments

For discount factors use Exhibit $12$B$-1$ and Exhibit $12$B$-2.$

Patterson uses a discount rate of $18\%$ for all of its investments. Patterson's cost of capital is $10\%.$

Required:

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Calculate the NPV for each investment by using a discount rate of $18\%.$ Use the minus sign to indicate a negative NPV$.$

Standard equipment $

CAM equipment $

Calculate the NPV for each investment by using a discount rate of $10\%.$

Standard equipment $

CAM equipment $$x$