EX.03X104 Cal 173 Check my work Mr. Melton agrees with his advisers that the company should use a desired rate of return of 14 percent to compute net present value to evaluate the viability of the proposed project. PV of $1 and PVA of 50 (Use appropriate factor(s) from the tables provided) Required a. Compute the net present value of the proposed project. Should Me Melton approve the project? b.&c. Shawn Love, one of the advisers, is wary of the cash flow forecast and she points out that the advisers failed to consider that the depreciation on equipment used in this project will be tax deductible. The depreciation is expected to be $82.500 per year for the four-year period. The company's income tax rate is 30 percent per year. Use this information to revise the company's expected cash flow from this project. Compute the net present value of the project based on the revised cash flow forecast. Should Mr. Melton approve the project? a (For all requirements, negative amount should be indicated by a minus sign. Round your Intermediate calculations and final answer to the nearest whole dollar) i shu 10 0379 school INO Net procent value Should Mr Melton approve the project? b.8. Net present value Should Mr. Melton approve the project? Yes ECO 2013 Principle TABLE 1 PRESENT VALUE OF $1 11 1 125 2 3 4 S 6 7 8 9 10 11 5% 0.961538 0.952381 0.924556 0.907029 0.888996 0.363838 0.854504 0.822702 0.821927 0.753526 0.790315 0.746215 0.759915 0.710681 0.730690 0.676339 0.702587 0.614609 0.675564 0.613913 0.619581 0.584679 0.624597 0.556837 0.600574 0.530321 0.577475 0.505065 0.555263 0.481017 0.533905 0.458112 0.513373 0.436297 0.493628 0.415521 0.474642 0.395734 6% 0.943396 0.889996 0.339619 0.792094 0.747258 0.704961 0.665057 0.627412 0.591598 0.558395 0.526785 0.496969 0.468839 0.442301 0.417263 0.393646 0.371364 0.350344 0.330513 7% 8% 99 10% 0.9345790125926 0.917431 14 165 20% 0.909091 0.592857 0.873439 0.377193 0.862069 0.857339 0333333 0.541630 0.826416 0.797194 0.769468 0.743163 0.816295 0.694444 0.793832 0.772133 0.751315 0.71780 06749720610658 0.578704 0.762895 0.735030 0.708425 0.683013 0.635518 0592080 0352291 0.482253 0.712936 0.630583 0.649931 0.620921 0.567427 O $19369 0.476113 0.101870 0.666342 0.630170 0.596267 0561474 0.506631 0.453587 0.4101420334593 0.622750 0.593490 0547038 0.313133 0,452349 0.399637 0.3538300279052 0.582009 0.540269 0,501566 0.466507 0.403883 0.350559 0.3050250232563 0.543934 0.500249 0.460428 0424098 0300610 0 307508 0.262953 0:193507 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0226654 0.161506 0.475093 0.428853 0.387533 0.350.194 0.287476 0.236617 0.195417 0.134586 0.444012 0.397114 0.355533 0.315031 0.256675 0.207359 0.165.463 0112157 0.414961 0.367698 0.326179 0.239664 0.229174 0.152069 0.145227 0.093464 0.387817 0.340461 0.299246 0.263331 0.201620 0.15971001251950077857 0.362446 0.315242 0 274538 0.2393920:152696 0.140096 0.107027 0061905 0.163122 0.291 890 0.251970 0.217620 0.1225920.093041 0054083 0.338733 0.197345 0.231073 0270260 0 145644 010780000002020045073 0.310574 0.06911002037561 0.091561 0.179359 0.250249 0.295864 0.211994 0.059602 0031301 0.116107 0.032945 0.276503 0.231712 0.194490 0.163505 145.13 TALO 0.175431 0.145614 010360 0072762 12 13 14 15 16 0.130040 17 18 19 00513550026054 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 72 1 2 3 4 5 6 7 S 9 10 11 12 13 14 15 16 17 18 19 20 48 0.961538 1.896095 2.775091 3.629895 4.451822 5242137 6.002055 6.732745 7.433332 8.110896 8.760477 9.355074 9.985645 10.563123 11.118387 11.652296 12.165669 12.659297 13.133939 13590326 5% 0 952381 1.859410 2.723248 3.545951 4.329477 5.075692 5.786373 6.463213 7.107822 7.721735 S 306414 S.563252 9.393573 9.598641 10.379658 10.837770 11.274066 11.699587 12 085321 12.462210 6% 0943396 1.333393 2.673012 3.465106 4.212364 4.917324 5.552381 6.209794 6.S01692 7.360037 7.886875 S.333344 3.352683 9 294954 9.712249 10.105895 10.477260 10.327603 11.158116 11.469921 79 8% 99 10% 125 149 0.934579 16% 20 0.9259260.917431 0.909091 0 592857 0.877193 0.862069 0.333333 1.803018 1.733265 1.759111 1.735537 1.690051 1 646661 1 605232 2.624316 1527778 2.577097 2.531295 2.4568522401831 2.321632 2245890 2106431 3.387211 3.312127 3239720 3.169865 3.037349 2.913712279318I 2.558735 4.100197 3.992710 3.859651 3.790737 3.604776 3.433081 3274294 2.990612 4.766540 4.622880 4.485919 4.355261 4. 111407 3.888068 3.684736 3 325510 5.389289 3.206370 5.032953 4.868419 4563757 258305 4.033565 3.004592 3.971299 5.746639 5.534519 3.334926 4.967610 4.638361 4343591 3.837160 6.515232 6.246835 5.995247 5.759024 5328250 4.946372 4.606544 4 030967 7.023582 6.710031 6 417655 0.144567 5.650223 5.276116 4.833227 4.192472 7.495674 7.138964 6.505191 6.495061 5.937699 5452733 5:028611 4 327060 7.942636 7536078 7 160725 6.813692 6.194374 5.660292 5.197107 4439217 S.357651 7.903776 7456904 7. 103356 6.433548 5.842362 3.342334 1532081 8.745468 S: 244237 7.756150 7.366687 6,628168 6.002072 5.467529 4610567 8.060658 7.606050 9.107914 3.559479 6.810864 6,142168 5575456 4.675473 9.446649 8.851369 8.312558 7.323709 6973986 6.263000 4.729561 5668497 S.543631 9 121638 8.021553 9.763223 6.372839 5.748704 7.119630 1774634 9.371887 5.755625 10.059057 3.201412 7249670 0.467420 5.817543 4812195 8.36.1920 7.365777 8.9055 6 350369 3.677455 4.843.496 10 335595 9.603599 S 513561 4569580 7.469144 6.623131 5926541 9.128540 10.594014 9 S18147 Check Antonio Melton, the chief executive officer of Baird Corporation, has assembled his top advisers to evaluate an Investment opportunity The advisers expect the company to pay $413,000 cash at the beginning of the investment and the cash inflow for each of the following four years to be the following. Note that the annual cash inflows below are net of tax. Your $88,000 Year 2 $106,000 Year 3 $120,000 Year 4 $188,000 Mr. Melton agrees with his advisers that the company should use a desired rate of return of 14 percent to compute net present value to evaluate the viability of the proposed project. (PV of $1 and PVA of $1 (Use appropriate factor(s) from the tables provided) Required a. Compute the net present value of the proposed project. Should Mr. Melton approve the project? b.&c. Shawn Love, one of the advisers, is wary of the cash flow forecast and she points out that the advisers failed to consider that the depreciation on equipment used in this project will be tax deductible. The depreciation is expected to be $82,600 per year for the four year period. The company's income tax rate is 30 percent per year. Use this information to revise the company's expected cash flow from this project. Compute the net present value of the project based on the revised cash flow forecast. Should Mr. Melton approve the project? (For all requirements, negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar.)