eBook Calculator Print item Payback Period Each of the following scenarios is independent. Assume that all cash flows are after tax cash flows. a. Colby Hepworth has just invested $400,000 in a book and video store. She expects to receive a cash income of $120.000 per year from the investment b. Kylie Sorensen has just invested $1,400,000 in a new biomedical technology. She expects to receive the following cash flows over the next 5 years: $350,000, $490,000, $700,000, $420,000, and $280,000. C Carsen Nabors invested in a project that has a payback period of 4 years. The project brings in $960,000 per year. d. Rahn Booth invested $1,300,000 in a project that pays him an even amount per year for 5 years. The payback period is 2.5 years. Required: 1. What is the payback period for Colby? Round your answer to two decimal places 3.33 years 2. What is the payback period for Kylie? Round your answer to one decimal place. 5x years 3. How much did Carsen invest in the project? 5,554 X 4. How much cash does Rahn receive each year? $ 3,554 X per year Pantal correct Net Present Value and Competing Projects Follow the format shown in Exhibit 120.1 and Exhibit 128.2 as you complete the requirements below. Spiro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. After-tax cash inflows for the two competing projects are as follows: Year Puro Equipment $320,000 280,000 Briggs Equipment $120,000 120,000 320,000 400,000 440,000 240,000 160,000 120,000 Both projects require an initial investment of $560,000. In both cases, assume that the equipment has a life of 5 years with no salvage value Required: Round present value calculations and your final answers to the nearest dollar 1. Assuming a discount rate of 12%, compute the net present value of each piece of equipment. Puro equipmenti Briggs equipment: 2. A third option has surfaced for equipment purchased from an out-of-state supplies. The cost is also $560.000, but this equipment will produce even cash flows over its 5-year life. What must the annual cash flow be for this equipment to be selected over the other two? Assum 12% discount rate Exhibit 123.1 Present Value of a Single Amount 9% 10% 12% 14% 16% 204250104 1 0.99010 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.89286 0.87719 0.86207 0.84746 0.83333 0.80000 0.76923 2 0.00030 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 079719 0.76947 0.74316 0.71818 0.69444 0.64000 0.59172 3 0.97059 094232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.71178 0.67497 0.64066 0.60863 0.57870 0 51200 0.45517 4 0.96098 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.63552 0.59208 0.55229 0.51579 0.48225 0.40960 0335013 5 0.95147 0.90573 0.66261 0.82193 0.78353 0.74726 071299 0.68058 0.64993 0.62092 0.56743 0.51937 0.47611 0.43711 0.40188 0:32768 0.26933 6 0.94205 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627_0.56447 0.5066) 0.45559 0.4104 0.37043 0.33490 0.26214 0.20718 7 0.93272 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.45235 0.39964 0.35383 0.31393 0.27908 0.20972 0.15937 8 0.92348 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.40388 0.35056 0.30503 0.26604 0.23257 0.167.77 0.12259 9 0.91434 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.16061 0.10751 0.26295 0.22546 0.19381 0.134220.09430 10 090529 082035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.32197 0.26974 0.22668 0.19106 0 16151 0.10737 0.07254 11 0.89632 080426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.28753 0.35049 0.28748 0.23662 0.19542 0.16192 0.13459 0.08590 0.05580 12 0.88745 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39717 0.35553 0.31863 0.25668 0.20756 0.16846 0.13722_0.11216 0.06872 0.04292 13 0.87866 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.22917 0.18207 0.14523 0.11629 0.09346 0.05498 0.03302 14 0.86996 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.20462 0.15971 0.12520 0.0985$ 0.07789 0.04398 0.02540 15 0.86135 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.11524 0.27454 0.23939 0.18270 0.14010 0.10793 0.08352 0.06491 0.03518 0.01954 16 0.85282 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 021763 0.16312 0.12289 0.09304 0.07078 0.05409 0.02815 0.01503 17 08430 1416 0.0002 051337 0.43630 0.37136 0 31657 0.27027 023107 0.19784 0 14564 0.10780008021 005998 0.04507 0.02252 0.01156 18 083602 070016 0.58719 0.40363 0.41552 0.35014 029586 025025 021199 0.17986 0.1 1004 0.09456 0.06014 0.05083 0.03756 0OTB01 0.00889 19 0.82774 0.68643 0.570.20 0.47464 0.39573 0.33051 0.27651 0.23171 0.19440 0.16351 0.11611 0.08295 0.05110 0.04108 001110 001441 0.00684 200819540 67297 6:35368 0.45630 0.37680 0.31180 0.25842 021455 17543 0.14864 0.10367 0.07276 0.05119 0.01651 0.02608 0.01151 0.00526 21 0,81143065075 0.53755 0.43833 0.15804 0.20416 024151 0.19966 0.163.70 0.13511 009256 0.06181 004430 0.0300002174000922 0.00105 22 080340 064684 052189 0.42196 0.34185 0.27751 0.22571 018204 0.19018 012285 0.08264 0.0559 0.01319 0.02622 0.01811 0.00718 0.00311 23 070544 0.63416 30669 049573 0.32557 0.26180 0 21005 0.11012 0.1377 011168 0.03 004911 0.03292 0.02222 0.01509 0.00590 0.00239 24 0.787502172 9:49193039012 011007 0.24608 0.19715 0.15770 0 126000.10153 0.06588 0.04103 00288 001881 0.01258 0.80472 0.00184 25 077977060953 6 1 0.17512 020510 01100 018425 0.14602 011597 00210 00 00 002447001506001043 0.00173000142 260.72205 0.0755 04610 0 25124 0 21951 0.1722001352001063000891005252001 0021000 01152 000 0.0002 0.00107 27 07649051566 0.45019 01462 0.26785 0.20717 0.16 0. 1 9 001678604659 0.02903001615 0.01146 0.00728 0.0022 0.00054 28 0.75684 0.57 04100334 025500 019567 150401159 5 5034604187 002551 0.0156200007 DOGOT 0.00197 0.00065 29074934 4 24502065 0.24205 1845610560103 25 000 OLTIS 0.02217 0.035 0.0052700006 0.00150000 300741920 5 21311411 OTT O 0.0106 0.0110000000H2E000124 00003 xhibit 128.2 Present Value of an Annuity 1% 2% 3% 4% 5% 6% % 10% 12% 14% 16% 18% 20% 25% 30% 1 0.99010 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.89286 0.87719 0.16207 0.84746 0.83333 0.80000 0.76923 2 1.97040 1.94156 1.91347 1.88609 1.85941 1.83339 1.80802 1.78326 1.75911 1.73554 1.69005 1.64666 1.60523 1.56564 1.52778 1.44000 1.36095 3 2.94099 2.88388 2.82861 2.77509 2.72325 2.67301 2.62432 2.57710 2.53129 2.48685 2.4018) 2.32163 2.24589 2.17427 2.10648 1.95200 1.81611 4 3.00197 3.80773 2.71710 3.62990 3.54595 346511 2.38721 3.31213 3.239723.16987 01735 2.91371 2.79818 2.69006 2.58873 2.36160 2.16624 5 4.85343 4.71346 4.57971 4.45182 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 3.60478 3.43308 3.27429 3.12717 2.99061 268928 243557 6 5.79548 5.60143 541719 5.24214 5.07560 4.91732 4.76654 4.62288 4.48592 4.35526 4.11141 3.88867 268474 2.49760 3.12551 2.95142 2.64275 7 6.72819 6.47199 6.23028 6.00205 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 4.56376 4.288304.03857 3.81153 3.60459 3.16114 2.80211 8 7.65168 732548 7.01969 6.73274 6.46321 6.20979 5.97130 574664 5.53482533491 496764 4.61886 4.14359 4.07757383716 132891 2.92470 9 8.56602 8.16224778611 743533 7.10782 6.80160 6.51523 6 24689 5.99525 5.75002 512825 4.94617 4.60654 4.30302 4.03097 3.46313 3.01900 109.47130 8.98259 8.53020 8.11090 7.72173 7.36000 7.02358 671008 6.417666.14457 5.65022 5.21612 4.83323 4.49409 4.19247 3.57050 2.09154 11 10.36763 9.78685 9.25262 8.76048 8.30641 7.88687 7.49867 7.13896 6.805196 49506 5.93770 5.45273 5.02864 4.65601 4.32706 3.65640 3.14734 12 11.25508 10.57534 9.95400 9.38507 8.86325 8.38384 7.94269 7.53608 7.160736.81369 6.19437 5.66029 5.19711 4.793224.43922 3.72512 3.19026 13 12.13374 11.34837 10.63496 9.98565 9.39357 8.85268 8.35765 7.90378 7.48690 7.10336 6.42355 5.84236 5.34233 4.90951 4.53268 3.78010 3.22328 14 13.00370 12.10625 11.29607 10.56312 9.89864 9.29498 8.74547 8.24424 7.786157.36669 6.62817 6.00207 5.46753 5.00806 4.61057 3.82408 3.24867 15 13.86505 12.84926 11.93794 11.11839 10.37966 9.71225 9.10791 8.55948 8,06069 7.60608 6.81086 6.14217 5.57546 5.09158 4.67547 3.85926 3.26821 16 14.71787 13.57771 12.56110 11.65230 10.83777 10.10590 9.44665 8.85137 8 312567.82371 6.97399 6.26506 5.66850 5.16235 4.72956 3.88741 3.28324 17 15.56225 14.29187 13.16612 12.16567 11.27407 10.47726 0.76322 9.12164 8.54363 802155 7.11963 637286 5.14870 5 22233 4.77463 3.90993 3.29480 18 16,39827 14.99203 13.75351 12.65930 11.68950 10.82760 10.05909 9.37189 8.75563 8 20141 7.24967 646742 5.81785 5.27316 4,81219 3.92794 3.30369 19 17.22601 15.67846 14.32380 13.13394 12.08532 11.15812 10.33560 9.60360 8.95011 8.36492 7.36578 6.55012 5.87746 5.31624 4.84350 3.94235 3.31053 20 18.04555 16:35143 14.87747 13.59033 12.46221 11.46992 10 59401 9.81815 9.12855 8 513567 46944 6.62313 5.92884 5.35275 4.86958 3.95388 3.31579 21 18.85698 17.0112115.41502 14.07016 12.62115 1.76408 10 83553 10.01680 9.29224 8.64869756200 6.68606597314 518368 4.89112 1.96311 331984 22 19.66038 17.65805 1593692 14 45112 13.16300 12.04158 11 06124 10.20074 9.442438.77154 764465 6.74294 601131 5.40990 490943 397049 3.32296 23 20.45582 1829220 16.44361 14.85684 13.45857 12.30338 11.27219 10.37106 9580218 88322 7718436.79206 6.04425 5.41212 492451 3.97639 3.32535 24 21.24339 18.91393 169355415 24695 13.798641255036 11 46933 10 52876 9.70661808414 728412 514 607263 545095 4911019111 112719 25 22.02316 19.52346 1741315 15.62208 14.093941278336 11.65358 10 67478 9.822589 07704 7.8414 6.87293 6.09709 5.46691 494759 3.93489 3.32861 26 22.79520 20.12104 17.87684 15.98277 14.37519 13 00317 11 82578 10 80998 9.928979.16095 7.89566 60608 6.11818 5.48043 4956323.98791 3.32970 27 23.55961 20.70690 18.32703 16 32959 14.643031321053 11 98671 10 935161002658 9.23722 7.94255 693515 6.13636 5.49189 4.96360 3.99033 3.33054 28 243164421.28127 18.76411 16.66106143081313.40616 12T7U 11 05108 10.116170.10657 7984026960666.15.204 5.50160 4.96967 199226 111118 29 25.06579 21.84438 19.18845 16.98371 15.14107 13 59072 1227767 11 15841 10.19828 9.36961 8.02181 6 98 104 6.16555 5.50983 4.97472199381 3.33168 30 25 80771 22.39646 19.6004417.29201 1517245 11.7643 12 4090411 25778 10 273659 42601 805518 7.002666.17720 5.51681 4.07894 3.90505 3.33206 2132715 $8 10624 =(1/1-1/1 171