Durable Tire Company needs to overhaul its auto lift syster or purchase a new one. The facts have been gathered, and they are as follows: BE (Click the icon to view the facts.) Present Value of $1 table Present Value of Annulty of $1 table Future Value of $1 table Future Value of Annuity of $1 table Which alternative is the most desirable with a current required rate of return of 20%? Show computations, and assume no taxes. Begin round selecting the formula to calculate the present value (PV) for the annual operating costs. Then, calculate the PV of the operating costs for both the current machine and the new machine. (Use factors to three decimal places, X.XXX, and currency calculations to the nearest whole dollar. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) i Data Table PV of cash operating costs Current machine New machine Current Machine New Machine $ 128,750 $ 166,800 36,350 29.750 Purchase price, new Current book value Overhaul needed now Annual cash operating costs Current salvage value Salvage value in 9 years 69.900 56,800 49.000 8,300 39,500 Print Done Reference 26% 0.794 0.630 0.500 0.397 0.315 Present Value of $1 Periods 2% 4% 1 1 0.980 0.962 2 0.961 0.925 3 0.942 0.889 4 0.924 0.855 5 0.906 0.822 6 0.888 0.790 7 0.871 0.760 8 0.853 0.731 9 0.837 0.703 10 0.820 0.676 11 0.804 0.650 12 0.788 0.625 13 0.773 0.601 14 0.758 0.577 15 0.743 0.555 16 0.728 0.534 17 0.714 0.513 18 0.700 0.494 19 0.686 0.475 20 0.673 0.456 21 0.660 0.439 22 0.647 0.422 23 0.634 0.406 24 0.622 0.390 25 0.610 0.375 26 0.598 0.361 27 0.586 0.347 28 0.574 0.333 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.294 0.278 0.262 0.247 0.233 0.220 0.207 0.196 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.199 0.184 0.170 0.158 0.146 0.135 0.125 0.116 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.135 0.123 0.112 0.102 0.092 0.084 0.076 0.069 12% 0.893 0.797 0.712 0.636 0.567 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 0.093 0.083 0.074 0.066 0.059 0.053 0.047 0.042 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.064 0.056 0.049 0.043 0.038 0.033 0.029 0.026 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.044 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.031 0.026 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.022 0.018 22% 0.820 0.672 0.551 0.451 0.370 0.303 0.249 0.204 0.167 0.137 0.112 0.092 0.075 0.062 0.051 0.042 0.034 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 0.004 24% 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.250 0.198 0.157 0.125 0.099 0.079 0.062 0.050 0.039 0.031 0.025 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 28% 0.781 0.610 0.477 0.373 0.291 0.227 0.178 0.139 0.108 0.085 0.066 0.052 0.040 0.032 0.025 0.019 0.015 0.012 0.009 0.007 0.006 0.004 0.003 0.003 0.002 0.002 0.001 0.001 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.003 0.002 0.002 0.001 0.001 0.001 0.001 32% 0.758 0.574 0.435 0.329 0.250 0.189 0.143 0.108 0.082 0.062 0.047 0.036 0.027 0.021 0.016 0.012 0.009 0.007 0.005 0.004 0.003 0.002 0.002 0.001 0.001 0.001 0.001 0.000 40% Periods 0.714 1 0.510 2 0.364 3 0.260 4 0.186 5 0.133 6 0.095 7 0.068 8 0.048 9 0.035 10 0.025 11 0.018 12 0.013 13 0.009 14 0.006 15 0.005 16 0.003 17 0.002 18 0.002 19 0.001 20 0.001 21 0.001 22 0.000 23 0.000 24 0.000 25 0.000 26 0.000 27 0.000 28 0.038 0.022 0.015 0.033 0.028 0.024 0.021 0.018 0.016 0.019 0.016 0.014 0.011 0.010 0.013 0.010 0.009 0.007 0.006 Present Value of Annuity of $1.00 in Arrears* Periods 2% 4% 6% 8% 1 0.980 0.962 0.943 0.926 2 1.942 1.886 1.833 1.783 3 2.884 2.775 2.673 2.577 4 3.808 3.630 3.465 3.312 5 4.713 4.452 4.212 3.993 6 5.601 5.242 4.917 4.623 7 6.472 6.002 5.582 5.206 8 7.325 6.733 6.210 5.747 9 8.162 7.435 6.802 6.247 10 8.983 8.111 7.360 6.710 11 9.787 8.760 7.887 7.139 12 10.575 9.385 8.384 7.536 13 11.348 9.986 8.853 7.904 14 12.106 10.563 9.295 8.244 15 12.849 11.118 9.712 8.559 16 13.578 11.652 10.106 8.851 17 14.292 12.166 10.477 9.122 18 14.992 12.659 10.828 9.372 19 15.678 13.134 11.158 9.604 20 16.351 13.590 11.470 9.818 21 17.011 14.029 11.764 11.764 10.017 22 17.658 14.451 12.042 10.201 23 18 292 14.857 12.303 10.371 24 18.914 15.247 12.550 10.529 25 19.523 15.622 12.783 10.675 26 20.121 15.983 13.003 10.810 27 20.707 16.330 13.211 10.935 28 21.281 16.663 13.406 11.051 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 8.649 8.772 8.883 8.985 9.077 9.161 9.237 9.307 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.562 7.645 7.718 7.784 7.843 7.896 7.943 7.984 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.687 6.743 6.792 6.835 6.873 6.906 6.935 6.961 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 5.973 6.011 6.044 6.073 6.097 6.118 6.136 6.152 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 5.384 5.410 5.432 5.451 5.467 5.480 5.492 5.502 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870 4.891 4.909 4.925 4.937 4.948 4.956 4.964 4.970 22% 0.820 1.492 2.042 2.494 2.864 3.167 3.416 3.619 3.786 3.923 4.035 4.127 4.203 4.265 4.315 4.357 4.391 4.419 4.442 4.460 4.476 4.488 4.499 4.507 4.514 4.520 4.524 4.528 24% 0.806 1.457 1.981 2.404 2.745 3.020 3.242 3.421 3.566 3.682 3.776 3.851 3.912 3.962 4.001 4.033 4.059 4.080 4.097 4.110 4.121 4.130 4.137 4.143 4.147 4.151 4.154 4.157 26% 0.794 1.424 1.923 2.320 2.635 2.885 3.083 3.241 3.366 3.465 3.543 3.606 3.656 3.695 3.726 3.751 3.771 3.786 3.799 3.808 3.816 3.822 3.827 3.831 3.834 3.837 3.839 3.840 28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 3.503 3.518 3.529 3.539 3.546 3.551 3.556 3.559 3.562 3.564 3.566 3.567 3.568 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.320 3.323 3.325 3.327 3.329 3.330 3.331 3.331 32% 0.758 1.331 1.766 2.096 2.345 2.534 2.677 2.786 2.868 2.930 2.978 3.013 3.040 3.061 3.076 3.088 3.097 3.104 3.109 3.113 3.116 3.118 3.120 3.121 3.122 3.123 3.123 3.124 40% 0.714 1.224 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.498 2.498 2.499 2.499 2.499 2.500 2.500 2.500 Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Compound Amount of $1.00 (The Future Value of $1.00) Periods 2% 4% 6% 8% 10% 12% 14% 1 1.020 1.040 1.060 1.080 1.100 1.120 1.140 2 1.040 1.082 1.124 1.166 1.210 1.254 1.300 3 1.061 1.125 1.191 1.260 1.331 1.405 1.482 4 1.082 1.170 1.262 1.380 1.464 1.574 1.689 5 1.104 1.217 1.338 1.469 1.611 1.762 1.925 6 1.126 1.265 1.419 1.587 1.772 1.974 2.195 7 1.149 1.316 1.504 1.714 1.949 2.211 2.502 8 1.172 1.369 1.594 1.851 2.144 2.476 2.853 9 1.195 1.423 1.689 1.999 2.358 2.773 3.252 10 1.219 1.480 1.791 2.159 2.594 3.106 3.707 11 1.243 1.539 1.898 2.332 2.853 3.479 4.226 12 1.268 1.601 2.012 2.518 3.138 3.896 4.818 13 1.294 1.665 2.133 2.720 3.452 4.363 5.492 14 1.319 1.732 2.261 2.937 3.797 4.887 6.261 15 1.346 1.801 2.397 3.172 4.177 5.474 7.138 16 1.373 1.873 2.540 3.426 4.595 6.130 8.137 17 1.400 1.948 2.693 3.700 5.054 6.866 9.276 18 1.428 2.026 2.854 3.996 5.560 7.690 10.575 19 1.457 2.107 3.026 4.316 6.116 8.613 12.056 20 1.486 2.191 3.207 4.661 6.727 9.646 13.743 21 1.516 2.279 3.400 5.034 7.400 10.804 15.668 22 1.546 2.370 3.604 5.437 8.140 12.100 17.861 23 1.577 2.465 3.820 5.871 8.954 13.552 20.362 24 1.608 2.563 4.049 6.341 9.850 15.179 15.179 23.212 25 1.641 2.666 4.292 6.848 10.835 17.000 26.462 26 1.673 2.772 4.549 7.396 11.918 19.040 30.167 27 1.707 2.883 4.822 7.988 13.110 21.325 34.390 28 1.741 2.999 5.112 8.627 14.421 23.884 39.204 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.266 10.748 12.468 14.463 16.777 19.461 22.574 26.186 30.376 35.236 40.874 47.414 55.000 63.800 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 7.288 8.599 10.147 11.974 14.129 16.672 19.673 23.214 27.393 32.324 38.142 45.008 53.109 62.669 73.949 87.260 102.967 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 18.488 22.186 26.623 31.948 38.338 46.005 55.206 66.247 79.497 95.396 114.475 137.371 164.845 22% 1.220 1.488 1.816 2.215 2.703 3.297 4.023 4.908 5.987 7.305 8.912 10.872 13.264 16.182 19.742 24.086 29.384 35.849 43.736 53.358 65.096 79.418 96.889 118.205 144.210 175.936 214.842 261.864 24% 1.240 1.538 1.907 2.364 2.932 3.635 4.508 5.590 6.931 8.594 10.657 13.215 16.386 20.319 25.196 31.243 38.741 48.039 59.568 73.864 91.592 113.574 140.831 174.631 216.542 268.512 332.955 412.864 26% 1.260 1.588 2.000 2.520 3.176 4.002 5.042 6.353 8.005 10.086 12.708 16.012 20.175 25.421 32.030 40.358 50.851 B4.072 B0.731 101.721 128.169 161.492 203.480 256.385 323.045 407.037 512.867 646.212 28% 1.280 1.638 2.097 2.684 3.436 4.398 5.629 7.206 9.223 11.806 15.112 19.343 24.759 31.691 40.565 51.923 66.461 85.071 108.890 139.380 178.406 228.360 292.300 374.144 478.905 612.998 784.638 1004.336 30% 1.300 1.690 2.197 2.856 3.713 4.827 6.275 8.157 10.604 13.786 17.922 23.298 30.288 39.374 51.186 66.542 86.504 112.455 146.192 190.050 247.065 321.184 417.539 542.801 705.641 917.333 1192.533 1550.293 32% 1.320 1.742 2.300 3.036 4.007 5.290 6.983 9.217 12.166 16.060 21.199 27.983 36.937 48.757 64.359 84.954 112.139 148.024 195.391 257.916 340.449 449.393 593.199 783.023 1033.590 1384.339 1800.927 2377.224 40% 1.400 1.960 2.744 3.842 5.378 7.530 10.541 14.758 20.661 28.925 40.496 56.694 79.371 111.120 155.568 217.795 304.913 426.879 597.630 836.683 1171.356 1639.898 2295.857 3214.200 4499.880 6299.831 8819.764 12347.670 Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Compound Amount of Annuity of $1.00 in Arrears* (Future Value of Annuity) Periods 2% 4% 6% 8% 10% 12% 14% 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2 2.020 2.040 2.060 2.080 2.100 2.120 2.140 3 3.060 3.122 3.184 3.246 3.310 3.374 3.440 4 4.122 4.248 4.375 4.506 4.641 4.779 4.921 5 5.204 5.416 5.637 5.867 6.105 6.353 6.610 6 6.308 6.633 6.975 7.336 7.716 8.115 8.536 7 7.434 7.898 8.394 8.923 9.487 10.089 10.730 8 8,583 9.214 9.897 10.637 11.436 12.300 13.233 9 9.755 10.583 11.491 12.488 13.579 14.776 16.085 10 10.950 12.006 13.181 14.487 15.937 17.549 19.337 11 12.169 13.486 14.972 16.645 18.531 20.655 23.045 12 13.412 15.026 16.870 18.977 21.384 24.133 27.271 13 14.680 16.627 18.882 21.495 24.523 28.029 32.089 14 15.974 18.292 21.015 24.215 27.975 32.393 37.581 15 17.293 20.024 23.276 27.152 31.772 37.280 43.842 16 18.639 21.825 25,673 30.324 35.950 42.753 50.980 17 20.012 23.698 28.213 33.750 40.545 48.884 59.118 18 21.412 25.645 30.906 37.450 45.599 55.750 68.394 19 22.841 27.671 33.760 41.446 51.159 63.440 78.969 20 24.297 29.778 36.786 45.762 57.275 72.052 91.025 21 25.783 31.969 39.993 50.423 64.002 81.699 104.768 22 27.299 34.248 43.392 55.457 71.403 92.503 120.436 23 28.845 36.618 46.996 60.893 79.543 104.603 138.297 24 30.422 39.083 50.816 66.765 88.497 118.155 158.659 25 32.030 41.646 54.865 73.106 98.347 133.334 181.871 26 33.671 44.312 59.156 79.954 109.182 150.334 208.333 27 35.344 47.084 63.706 87.351 121.100 169.374 121.100 169.374 238.499 28 37.051 49.968 68.528 95.339 134.210 190.699 272.889 16% 18% 1.000 1.000 2.160 2.180 3.506 3.572 5.068 5.215 6.877 7.154 8.977 9.442 11.414 12.142 14.240 15.327 17.519 19.086 21.321 23.521 25.733 28.755 30.850 34.931 36.786 42.219 43.672 50.818 51.660 60.965 60.925 72.939 71.673 87.068 84.141 103.740 98.603 123.414 115.380 146.628 134.841 174.021 157.415 206.345 183.601 244.487 213.978 289.494 249.214 342.603 290.088 405.272 337.502 479.221 392.503 566.481 20% 1.000 2.200 3.640 5.368 7.442 9.930 12.916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 87.442 105.931 128.117 154.740 186.688 225.026 271.031 326.237 392.484 471.981 567.377 681.853 819.223 22% 1.000 2.220 3.708 5.524 7.740 10.442 13.740 17.762 22.670 28.657 35.962 44.874 55.746 69.010 85.192 104.935 129.020 158.405 194.254 237.989 291.347 356.443 435.861 532.750 650.955 795.165 971.102 1185.744 24% 1.000 2.240 3.778 5.684 8.048 10.980 14.615 19.123 24.712 31.643 40.238 50.895 64.110 80.496 100.815 126.011 157.253 195.994 244.033 303.601 377.465 469,056 582.630 723.461 898.092 1114.634 1383.146 1716.101 26% 1.000 2.260 3.848 5.848 8.368 11.544 15.546 20.588 26.940 34.945 45.031 57.739 73.751 93.926 119.347 151.377 191.735 242.585 306.658 387.389 489.110 617.278 778.771 982.251 1238.636 1561.682 1968.719 2481.586 28% 1.000 2.280 3,918 6.016 8.700 12.136 16.534 22.163 29.369 38.593 50.398 65.510 84.853 109.612 141.303 181.868 233.791 300.252 385.323 494.213 633.593 811.999 1040.358 1332.659 1706.803 2185.708 2798.706 3583.344 30% 1.000 2.300 3.990 8.187 9.043 12.756 17.583 23.858 32.015 42.619 56.405 74.327 97.625 127.913 187.288 218.472 285.014 371.518 483.973 630.165 820.215 1067.280 1388.464 1806.003 2348.803 3054.444 3971.778 5164.311 32% 1.000 2.320 4.062 8.362 9.398 13.406 18.696 25.678 34.895 47.062 63.122 84.320 112.303 149.240 197.997 262.356 347.309 459.449 607.472 802.863 1060.779 1401.229 1850.622 2443.821 3226.844 4280.434 5624.772 7425.699 40% 1.000 2.400 4.360 7.104 10.946 16.324 23.853 34.395 49.153 69.814 98.739 139.235 195.929 275.300 386.420 541.988 759.784 1064.897 1491.576 2089.206 2925.889 4097.245 5737.142 8032.999 11247.199 15747.079 22046.910 30866.674 Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28