Eve Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and wit cost $905,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows) (Click the icon to view Present Value of Ordinary Annuity of $1 table) (Click the icon to view Present Value of $1 table) Read the requirements Requirement 1. Compute this project's NPV using Eve's 16% hurdle rate. Should Eve 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 ( Inflow Years 1 Year 1 Present value of each year's inflow: (n=1) Year 2 Present value of each year's inflow: (n-2) Year 3 Present value of each year's inflow: (n=3) Year 4 Present value of each year's inflow: (n=4) Year 5 Present value of each year's inflow: (n = 5) Year 6 Present value of each year's inflow: (n=6) Total PV of cash inflows Year 0 Initial investment Net present value of the project -10%) Present Value Data table Year 1 $ 265.000 Year 2 250,000 Year 3 225,000 Year 4 211,000 Year 5 200,000 177,000 Year G Print Done Present Value of $1 Periods Period 1 1% 2% 3% 4% 5% 6% 7% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 Period 8 Period 9 0.914 0.837 0.766 0.703 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.645 0.592 0.544 0.500 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 Period 13 0.879 0.773 0.681 Period 14 0.870 0.758 0.661 0.577 0.505 Period 15 0.861 0.743 0.642 0.555 0.481 0.601 0.530 0.469 0.442 0.388 0.417 0.362 0.429 0.444 0.397 0.356 0.319 0.257 0.415 0.368 0.326 0.290 0.229 0.340 0.299 0.263 0.205 0.315 0.275 0.239 0.183 0.460 0.424 0.361 0.422 0.386 0.322 0.388 0.350 0.287 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.308 0.284 0.263 0.225 0.194 0.270 0.247 0.227 0.191 0.162 0.237 0.215 0.195 0.162 0.135 0.208 0.187 0.168 0.137 0.112 0.182 0.163 0.145 0.116 0.093 0.160 0.141 0.125 0.099 0.078 0.140 0.123 0.108 0.084 0.065 Period 16 0.853 0.728 0.623 0.534 0.458 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 Period 18 0.836 0.700 0.587 0.494 0.416 Period 19 0.828 0.686 0.570 0.475 0.396 Period 20 0.820 0.673 0.554 0.456 0.377 0.394 0.339 0.317 0.350 0.296 0.331 0.277 0.312 0.258 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.242 0.199 Period 22 0.803 0.647 0.522 0.422 0.342 Period 23 0,795 0.634 0.507 0.406 0.326 0.262 Period 24 0.788 0.622 0.492 0.390 0.310 Period 25 0.780 0.610 0.478 0.375 0.295 0.278 0.226 0.184 0.164 0.135 0.093 0.064 0.150 0.123 0.083 0.053 0.044 0.031 0.022 0.056 0.046 0.038 0.026 0.018 0.211 0.170 0.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 0.247 0.197 0.158 0.126 0.102 0.066 0.233 0.184) 0.146 0.116 0.092 0.059 0.043 0.035 0.028 0.019 0.013 0.038 0.030 0.024 0.016 0.010 Period 26 0.772 0.598 0.464 0.361 0.281 0.220 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161. 0.125 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 0.098 0.076 0.047 0.029 0.023 0.018 0.011 0.007 mer to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost S rojected net cash inflows.) ent Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Requirements 1. Compute this project's NPV using Eve's 16% hurdle rate. Should Eve invest in the equipment? 2. Eve could refurbish the equipment at the end of six years for $102,000. The refurbished equipment could be used one more year, providing $77,000 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 Eve 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.) - X e parentheses table Print Done Year 1 $ 2 Year 2 2 Year 3 2 Year 4 21 Year 5 20 Year 6 17 Print