Drop down options:

Requirement 1: Cury Industries (should or should not) invest in the equipment.

Requirement 2:

negative or positive

large enough or not large enough

should or should not

Data Table Year 1 $ Year 2 Year 3 260,000 253,000 223,000 214,000 201,000 175,000 Year 4 Year 5 Year 6 Reference Present Value of $1 1 4% ? 0.925 Periods 1% 00 QQ 71 2 01 Q343 0971 Q342 015 4 1 1924 1 Q06 52 4 4 6% 0.948 40 2 0747 1E /13 1925 794 8 1 % 42 0772 10% 12 28 0797 .51 0712 06 01 0567 14% 0.78 086 0513 15% 75E 1.72 1.497 16% 2 Q641 0.52 1.47 1% Q347 Q1 QQ Q516 Q4 20% Q94 1.57 0.4 1.402 5 60 42 * Q13 76 744 1923 14 06 Q. 0 1 48 Q11 Q646 Q814 6 58 6 23 Q.52 Q1544 50 Q6 Q5 .54 500 .4 1547 802 .4 .42 884 813 .48 2.424 .456 .400 081 Q. .452 1.404 01 22 2.42 410 Q376 4 Q14 27 Q5 28 24 27 225 247 227 2.11 27 2 14 0.12 Q270 11 12 13 14 15 1 Q04 Q:43 722 ! 0681 Q642 660 Q01 577 .555 Q5 87 1.50 0.56 1.41 527 1.497 1.48 1.442 1.417 0.46 0.444 .416 0.429 Q340 15 368 0326 Q299 0.26 60 Q13 .20 .28 2 0.2 257 .229 0.25 .2 .20 .12 .1 Q140 Q215 0.1 .1 Q.141 1 0.1% .1 .146 126 0.1 0.1 17 Q116 4 15 Q112 Q5 082 16 17 1 13 44 28 0 14 0 $$ Q623 5 570 64 Q5.4 .513 .44 .475 .456 2.45 46 .416 4 1 12 .28 .277 2.22 2 250 222 Q215 252 21 212 Q.14 .1 21 1 .1 @14 .149 1 .146 Q.1 :116 14 1 1 Q03 .17 1 QQQ 001 Q0 QQQ QQ 1 1 @ 1 .048 4 Q045 Q038 1 028 21 22 24 11 Q5 660 Q647 1.624 22 0.5 1.522 1.50 1.492 Q4 .422 .4 Q390 Q342 0326 Q10 Q294 .27 .252 247 2.242 .226 Q211 Q17 Q1 .14 Q10 15 .14 01 Q13 .1% Q15 Q122 2.112 Q102 QQ: QQ74 Q06 4 0066 Q049 04 168 048 040 % Q044 0.03 .02 Q031 0.026 0022 QQ19 0.02 Q015 2013 1 14 13 744 1 Q878 Q11 6 Q846 614 .52 .82 .52 1544 150 5 1.54 1.50 .4 0547 502 .4 42 0513 Q.46 .424 0.42 2.404 81 22 .400 Q351 3 : ? 2.24 247 384 05 .26 Q14 0.28 .225 1 .27 23 14 .1 20 1 11 12 136 :112 Q 1 4 722 , 1 , Q1 Q642 .60 25 001 0577 .88 1.55 587 0.520 41 527 .47 1.48 .442 .417 2.46 .444 1.415 62 .49 40 15 6 Q326 29 25 50 13 2 2 0.28 Q2 .257 .223 .205 .1 2 . Q1 .1 140 2.215 .1 2.141 .1 .1% 18 146 .15 102 Q.18 .17 2.118 24 14 15 44 1 17 1 13 2 Q14 Q2 Q06 QQ 64 54 813 .494 .45 .466 45 46 0416 4 Q371 80 1 12 .277 2.22 2 20 2 Q215 .252 1 2.212 194 .1 21 2.1 Q1 .14 2.149 .1 Q.148 .1 2.118 2.14 0.1 .1 @@ 0.107 0 Q01 QQQ 1 0.00 QQ 1 071 @ Q. 1 .048 064 Q045 001 Q026 28 20 11 21 22 3 24 5 7g 47 Q34 22 Q810 5g .822 807 .492 .47 .4 .422 2.4 Q342 Q:28 Q10 0.25 24 278 22 .247 2 242 226 Q211 .17 Q14 .1 @14 1 .1 .148 164 .150 .1 .18 2.118 .1 Q13 Q3 Q112 .74 Q102 . 092 4 66 049 043 .0 Q063 .044 1 0.022 45 028 1 040 @@ 022 QQ15 Q036 02 QQ13 @@ 024 QQ18 QQ10 8 27 9 764 75 Q:749 .42 598 .5 174 552 464 0.450 Q.437 0424 .412 1 Q4 Q3 Q21 Q21 .26 0.2 Q242 21 220 .207 Q1% Q15 174 0.1 Q161 Q150 2.141 Q11 15 .15 Q116 .17 .1 Q098 @ QQ 06 4 Q076 QQQ @@ 053 047 0042 0 .023 0.026 Q022 020 Q.026 0.02 Q020 QQ17 15 .021 Q016 Q014 QQ12 2014 QQ 1 2010 Q006 00g 06 0 04 40 4 07 20 Q142 046 022 Q11 204 .00 1 0.001 @@ 22 Q.141 0.64 004 21 QQ13 002 Q001 .001 Q1 Periods 12% 20% - 2 % 990 1971 1970 142 13 241 234 29 32 3.17 4. 4.713 4.5 4% 2 1. 2. 3 4.42 0962 19 2.723 3548 4. Present Value of Ordinary Annuity of $1 6% 10% Q943 76 0 1 1. 17 1.769 1. 2873 2.24 2.5 2.521 24 3.4 3.12 3.240 3.1 4.212 4.100 3.1 190 24 3 3606 14% 15% 1.647 1.8 22 2.2 214 26 3.42 3.362 1% 1.06 2.248 2. 3.274 1% 47 1566 2.174 260 127 1828 2.16 2.58 21 4 5 4.2 9 10 5.7% 6.72 82 ,566 471 5 5.472 28 .1 5.417 5.242 6.23 2002 7020 .45 .520 111 5075 5. .4 7.10 7722 4. 5.5 210 6. 0 4. 5.2 671 15 24 4. 5.2 5.47 6.247 6.71 4.4 5022 5.5% 596 $41 4.265 4. 5.5 5.78 146 4.111 4564 4. 5 560 3.74 4.1 4.4 4.2 5.19 5 4.09 4.344 4. 4 312 4.7 4. 4.44 28 3.66 4.1 4.1 4.4$ 5.216 11 12 1 14 16 18 , 3.2 , 11.2 10575 4 3. 12.14 | 114 | 10.85 3. 1304 | 12.1111.2]105 13] 12.34] 11.11.11| 10 4 9.2% 12 7.4 43 ,746 10 7.1 58 4 .244 8 711 4 1 $4 6.14 103 E06 5 5.46% 14 5.6 5.424 542 $ 6 802 11 8.142 5.234 5.421 55 5.724 547 5.029 5.137 542 5.46 55 4.66 4. 4.10 5. 5.092 4 4.4 4. 4.11 48 16 17 1 13 14.71 | 13.87 | 12561 11.62 | 10, | 101 9.447 6.114.22] 13.112.111.274110.4 , 14 .41128] 1111 17.22 1157] 14.24 13.14]12111.1]1 148 | 16.81 | 14. | 13.80] 12.4 | 11.4 10.594 1 2.1 ? 04 31 13 ,544 9.129 4 22 201 814 $374 120 250 749 $25 $48 6.560 6.623 564 $247 $12 6.1 $ 5 5.749 6 5. 5. 5.1 5.222 5.27 5.18 5.3 4. 4.75 4.2 4.44 4. 21 $49 17]1711116.416 14.29]121 111.784 11|1 19. | 17 | 167] 14.451 | 12.1| 12 42 | 11.1 | 10.21 20.48 | 1.2 | 16.444 | 14. | 13.4| 12.3 | 11.2 | 10371 21.24 | 114 | 16 | 15.247] 13.7| 12.88 | 11.4 | 10.829 922 9442 950 7.562 7645 74 $74 $12 $259 639 $.44 53 11 6044 EQ 54 5.41 5.42 5.451 4.1 4. 4.25 4. 24 -- 72 52 ,56 9471 6.4 26 .18 6.2 020 , ,530 02 7.435 .11 5. 6.463 7.1 7.2 552 $210 02 5 571 $15 24 5.2 5747 6.247 8710 5 556 5.996 $41 4. 5.6 5.759 6.147 4.584 4 5. 50 4.2 4. 4.946 5.216 4.1 4.4 4.772 5019 4.Q 4.344 4. 4. 312 4.0 4.0 4.44 606 3. 4.1 4.1 11 12 13 14 15 1 9.28 , 11.2] 105 | 94 25 12.14] 11.41 13.04 | 12.1] 11.2| 10.58 13] 12.34] 11.11.11| 10 4 .52 9.25 12 7.4 948 5& ,745 1 7.1 74 .244 06 7.11 .4 1 $495 $.14 1 5. $14 $424 2 $11 5.45 5 5842 2002 $142 5.234 5.421 55 5.724 547 5.028 5.17 5342 5.4 556 4.666 4.7 4.1g 500 5 4. 4.4 4.5 4.11 4.5 6.26 1 122 18 17 1 19 14.1 5| 12 111.1110.1 9.447 16 14.1.112.1 11.274|10.47 37 ]14.1.4112 11 101069 17.228 | 15.7| 14.24 | 13.14| 12.0 | 11.15|10 1047|161114.37711312.4| 11.4]10504 13 .544 , 9129 824 022 201 514 674 7.12 7.250 7.4 $457 6.550 5.54 647 $128 6.1 6.259 5669 5.749 518 5. 6 5.1 5.222 5.2 5316 5 4.70 4.776 4. 12 4. 44 4. 04 21 849 2 12 $359 1 | 17.11 | 15.415 | 14.09] 121 | 11.74 | 18 | 1217 19]17115114.41 13.1|12042111.1 |10.2 20.45] 1.22] 16.444 | 14.7 | 13.4|12| 11.272 | 10371 21.24]114116 16.247113.712.11.4|10829 22.02 | 1988 | 17.41] 15.22 | 14.94 | 12.|1184 | 10.75 292 4442 50 23 7.5 $45 74 42 $742 2 $ 836 5 11 44 54 5.410 5.4 5.451 5.457 4.1 4. 4.25 4. 4.94 24 5 .44 5.464 27 227 | 2.121 | 17] 16. | 14.3 | 13 | 11.6 | 11 3929 11 5 | 2011|16114.84 | 13.211111.110]107 9.237 24.31] 21.21 | 1.4 | 16. | 14.| 13.4 | 12.17] 11.1 | 10.116 8. | 21 44 | 19.1| 16.4 | 16.141 | 13.1 | 12.2 | 11.1| 10.1 5. | 2 | 19. | 172 | 163 | 13. | 12.4| 11.26| 10.274 427 43 984 22 06 5 1 33 6.41 814 $564 1 $56 113 8.1 $1 6.1 $1F 5.4 5.492 5.50 5510 5.517 4.6 4.4 4.37 4.36 4.3 47 27.115]13717.116.04] |11.11.67 3779 244 7.1 5642 5.84 4.97 11.424|5.11.41.28]16|G|12.2102 5 04 7.1 6246 5.864 4. Cury Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $925,000. Projected net cash inflows are as follows: E: (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. 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.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash PV Factor Present Years Inflow (i = 14%) Value 1 2 Present value of each year's inflow: (n = 1) (n = 2) (n = 3) (n = 4) (n = 5) 3 4 5 6 (n = 6) Total PV of cash inflows 0 Initial investment Net 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 $100,000. The refurbished equipment could be used one more year, providing $76,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $50,000 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 (outflow]/inflow (i = 14%) Value Refurbishment at the end of Year 6 (n = 6) Cash inflows in Year 7 (n = 7) Residual value (n = 7) Net present value of the refurbishment 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