E12-23A (similar to) Jeren Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Charleston, South Carolina. The solar panel project would cost $575.000 and would provide cost savings in its utility bills of $80,000 per year. It is anticipated that the solar panels would have a life of 15 years and would have no residual value. Read the requirements. Requirement 1. Calculate the payback period in years of the solar panel project. Determine the formula, then calculate the payback period. (Round your answer to two decimal places.) = Payback period 1. Calculate the payback period in years of the solar panel project. 2. If the company uses a discount rate of 10%, what is the net present value of this project? 3. If the company has a rule that no projects will be undertaken that have a payback period of more than five years, would this investment be accepted? If not, what arguments could the energy manager make to try to obtain approval for the solar panel project? 4. What would you do if you were in charge of approving capital investment proposals? Present Value of Annuity of $1 Periods 1% 1. o fil 20% 0333 1.525 2106 n mit") :do ovo On to o l ri | iiiiii is in | || } } ini tri ai Hi Hui | | 0 . | 0 | 12.165 | 11.25 | 10.63 | 12 2849 | 1.93 | 1.16 | 10 220 | 14.2 |3 2462 | 1470 93 74| 5 | 1. | 2|15 22 | 19 |12| 2|3 |152 235 | 27 355 | 23.15|6 |7 9 | | | + " with tit 1 |221 Present Value of $1 3954 % 1952% 0.990 546 0.952 896 0.943 0.890 896 0.925 0.857 10% 0.909 0.826 0.751 0.683 12% 0.893 0.797 14% 0.877 0.769 18% 0.862 0.743 0.641 19% 0.847 0.718 0.609 0.516 SO OOOOO 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 * 0.099 0.078 0.065 =98888 0.00+ Future Value of $1 Periods 1% 1010 1030 1.061 4% 1.040 1.082 1.125 1.170 1.217 1.020 1.030 1.041 1.051 1.062 5% 1050 1.103 1.158 1.216 1.276 8% 1060 1.124 1191 1.262 1338 9% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 1496 1.140 1.300 1.482 1.689 1093 1.126 1.159 1.925 1.974 2.195 1.072 1.587 1.714 1.851 2211 1419 1504 1994 1.689 1791 1.772 1.949 2.144 2.358 30 2.502 2853 3 252 1.340 1.407 1.477 1.551 1.629 1.710 2.476 2.773 1.999 1.083 1.094 1.105 1.116 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.486 1.641 1.811 2.208 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 888 ISO 400W 2.159 2.594 3.106 1896 1.160 1 346 1.561 1.811 2.100 2436 2826 3.278 3.803 4411 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85.850 378.721 1.265 1.316 1.369 1423 1.480 1.539 1.601 1.665 1.732 1.801 2 191 2.666 3.243 1.898 1896 209% 1.180 1200 1.392 1.440 1.643 1728 1.939 2.074 2.288 2488 2.700 2.986 3.185 3.759 4.435 5.160 5.234 6.192 6.176 7.430 7.288 8.916 8.599 10.699 10.147 12.839 11.974 15.407 27.393 38 338 62.669 95.396 143.371 237.376 750.378 | 1,469.772 1.127 1.796 1513 2261 2925 1.138 1.149 1.161 1.220 1.886 1.980 2.079 2.653 3.386 4.322 1.558 2012 2.133 2.397 3.207 4.292 5.743 10.286 3.707 4 226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188.884 2.853 3.138 3.452 3.797 4.177 6.727 10.835 17 449 45.259 3.479 3.896 4.363 4.887 5.474 9.646 17.000 29.960 93 051 3.172 4661 6.848 10.063 21.725 1.806 2094 348 489 3.262 7.040 Periods 19% 1046 1456 1.000 2140 4.921 6.610 3% 1.000 2030 3.091 4.184 5.309 6.458 7.662 8.892 10.159 11.454 6.975 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14 947 16.097 22.019 28.243 34.785 48.885 000 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 Future Value of Annuity of $1 4% 5% 8% 8% 1296 1.000 1.000 1.000 1.000 1.000 1.000 2.040 2.050 2.060 2.080 2.100 2.120 3.122 3.153 3.184 3.246 3.310 3.374 4.246 4.310 4.375 4.506 4.641 4.779 5.416 5.526 5.637 5.867 6.105 6.353 6.633 6.802 7.336 7.716 8. 115 7.898 8.142 8.394 8.923 9.487 10.089 9.214 9.549 9.897 10.637 11.436 12.300 10.583 11.027 11.491 12.488 13.579 14.776 12.006 12.578 13.181 14487 15.937 17.549 13.486 14.207 14.972 16.645 18.531 20.655 15.025 15.917 16.870 18.977 21.384 24.133 16.627 17.713 18.882 21.495 24.523 28.029 18.292 19.599 21.015 24215 27.975 32 393 20.024 21.579 23.276 27.152 31.772 37.280 29.778 33.066 36.786 45.762 57.275 72.052 41.646 47.727 54.865 73.106 98.347 133.334 56.0851 66.439 79.058 113.283 164.494 241.333 95.025 120.800 154.762259.057 442.593767.091 8.536 10.730 13.233 16.085 19.337 185% 1.000 2.160 3.506 5.066 6.877 8.977 11.414 14.240 17.519 21.321 25.733 30.850 36.786 43.672 51.650 115.380 249.214 530.312 2.360.757 1896 204 1.000 1.000 2.180 2.200 3.572 3.640 5.215 5.368 7.154 7.442 9.442 9.930 12.142 12.916 15.327 16.499 19.086 20.799 23.521 25.959 28.755 32.150 34 931 39.581 42.219 48.497 50.818 59.196 60.965 72.035 146.628 185.688 342.603 471.981 790.948 1,181.882 4,163.213 7,343.858 23.045 12.808 14.192 15.618 17.086 18.599 26.870 36459 47.575 7 5.401 27.271 32.089 37.581 43.842 91.025 181.871 356.787 1,342 025