Exercise 24-2 Net present value LO P3 Beyer Company is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 9% return on its investments. (PVOfS1. of $1. PV Aer$1, and FVA of $) (Use appropriate factor(s) from the tables provided.) Year 10 Year 2 Year 3-Year 4-1 rear -Tota $69,000 $49,000 $84,000 $160,000 38,00 $400,000 Net cash flows a. Compute the net present value of this investment (Round your answers to the nearest whole dollar.) Present Present Value Value of1 of Net Cash Net Cash Flows Year Flows $ 69,000 49,000 84,000 160,000 38,000 S 400,000 Totals Amount invested Net present value TABLE B.1 Present Value of 1 p=1/(1 + ir Rate 12% Periods 1% 0.9901 0.9804 09709 0.9615 09524 09434 09346 09259 09174 09091 08929 0.8696 9803 0.9612 9426 0.9246 09070 08900 08734 08573 0.8417 08264 0.7972 0.7561 09706 0.9423 09151 0.8890 08638 0.8396 08163 0.7938 0.7722 0.7513 07118 0.6575 4 0.9610 09238 08885 08548 08227 0.7921 0.7629 0.7350 0.084 06830 06355 05718 5 0.9515 0.9057 0.8626 08219 07835 07473 0.7130 0680 06499 0.6209 0.5674 0.4972 6 0.9420 0.8880 0.8375 0.790307462 7050 0.6663 06302 0.5963 05645 0.5066 0.4323 7 0.9327 0.8706 0.8131 0.7599 07107 06651 0.6227 05835 0.5470 05132 0.4523 0.3759 8 09235 0.8535 0.7894 0.7307 06768 06274 0.5820 05403 0.5019 0.4665 04039 0.3269 9 0.9143 08368 07664 0.7026 064460.5919 0.5439 0.5002 0.4604 0.4241 03606 0.2843 10 0.9053 08203 0.7441 06756 06139 05584 05083 0.4632 0.4224 0.3855 0.3220 0.2472 0.8963 0.8043 07224 0.6496 0587 0.5268 0475 04289 0.3875 03505 0287S 02149 12 0.8874 0.7885 0.7014 0.6246 05568 0.4970 04440 0.3971 0.3555 03186 02567 0.169 13 0.8787 0.7730 06810 0.6006 05303 0.4688 04150 0.3677 0.3262 02897 02292 0.1625 14 08700 0.7579 06611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 2046 01413 15 08613 07430 06419 0.5553 04810 Q41 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 16 0.8528 0.7284 06232 05339 0.4581 .3936 03387 0.2919 02519 0.2176 0.163 0.1069 17 08444 07142 06050 0.5134 0.4363 0.3714 03166 02703 02311 0.1978 0.1456 O0929 18 08360 0.7002 05874 04936 04155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 19 0.8277 0.6864 05703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 20 0.8195 0.5730 0.5537 04564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 25 0.7798 06095 04776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 00923 00588 0.0304 30 07419 0.552 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 00573 00034 O0151 35 0.7059 05000 03554 02534 .1813 0.1301 0.0937 00676 00490 0.0356 00189 0.0075 40 0.6717 0.4529 0.3066 0.2083 0.1420 092 00668 0460 0.0318 0022 01070.0037 tom kdy?Using te ton of "2 and-5%(12senannual pends and asemaanual rae of 5%),te tori 05568. You would nedtoaess2sunty55000x05568 TABLE B.2 Future Value of 1 f-1 + iy Rate 127 Periods 1% 0 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 1,0000 110100 10200 1.0300 10400 10500 10600 1.0700 10800 1.0900 1.1000 1.1200 21.0201 10404 1.0609 1.0816 1.1025 136 1449 1.1664 .188 1200 244 3 10303 10612 10927 1.1249 11576 11910 12250 1.2597 0 1 4 1.0406 1.0824 1.1255 1.169912155 2625 8 3605 1.41161.4641 15735 10000 1.1500 13225 3310 14049 15209 1.7490 5 1.0510 1.1041 1.15931.2167 12763 1.3382 1.4026 1.4693 1.5386 1.6105 1.7623 20114 6 1.0615 1.1262 1.1941 1.2653 1.3401 1.4185 15007 15869 16771 1.7716 1.97382.3131 10721 1.1487 1.2299 19 1.4071 15036 1.6058 1.7138 1.8280 19487 2.2107 2.6600 1.0829 1.1717 12668 13686 1.4775 15038 17182 18509 19926 21436 24760 30590 1.0937 1.1951 1.3048 1.4233 15513 1.6895 18385 1.9990 2.1719 23579 2.7731 35179 10 1.1046 1.21901.3439 14802 1.6289 1.7908 19672 2.1589 2.3674 25937 3.1058 40456 " 1.1157 1.2434 1.3842 1.5395 1.7103 18983 2.1049 2.3016 2.5804 28531 3.4785 45524 12 1.1268 12682 14258 1601 1.7959 20122 2522 25182 2.8127 3134 .860 3503 13 1.1381 1.2936 1.4685 1651 18856 2.1329 2.4098 2.719630658 3.4523 43635 6.1528 4 1.1495 1.3195 1.5126 1.7317 19799 22609 2.5785 29372 3.3417 3.7975 48871 70757 15 1.1610 1.3459 1.5580 1s009 20789 23966 270 3.1722 36425 4.1772 54736 Bin 16 1.1726 1.372 16047 18730 2.1829 25404 2.9522 34250 .9703 45950 61304 93576 17 1.1843 1,400216528 19479 22920 26928 31588 000 43276 5.0545 68660 107613 18 1.1961 14282 1.7024 20258 2.4066 28543 3.3799 3.960 4.7171 555997.690012.3755 19 1.2081 1468 17535 21068 25270 30256 36165 3157 11 61159 86128 14.2318 20 1.2202 14159 1.8061 2.1911 2.6533 32071 28697 4.6610 5.6044 67275 96463 163665 25 12824 1.640620938 26658 3.3864 42919 54274 68485 86231 10.8347 170C01 29100 30 13478 18114 24273 3.2434 43219 57435 7,6123 10627 32677 74494 29.9599 66.2118 35 14166 1.9999 28139 39461 55160 7.6861 10.6766 14.7853 20.4140 28.1024 52.7996 133.1755 40 1.4889 2.2080 32620 8010 70400 10.2857 14 9745 21.7245 31.4094 45.2593 93.0510 267 8635 'Iedto the future value of a known present munL For eumple: wha the Kam lated value of $3.00 invested today at 8% compounded qarerty kr 5years? Using faan of "-"andi-sap quredy perioh and aquanaty ate ta ne of 2%),the toer is 1.4899. The arumutted value issus,osam x14xsn. TABLE B.3 Present Value of an Annuity of 1 5% 10% 12% 15% Periods 0.9901 0.9804 0.9709 09615 0.9524 0.9434 0.9346 0.9259 09174 0.9091 0.8929 0.8696 2 1.9704 19416 19135 18861 1.8594 18334 1.8080 1.7833 1.7591 1.7355 1.6901 1.6257 3 2.9410 28839 2.8286 2.7751 2.7232 2.6730 26243 2.577125313 24869 2.4018 2.2832 39020 3.8077 3.7171 36299 3.5460 3A651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 5 4.8534 4.71354.579744518 4.3295 4.2124 41002 3.9927 3.8897 3.7908 3.6048 3.3522 6 5.7955 5.6014 5.4172 52421 5.0757 49173 4.7665 4.6229 4.4859 43553 4.1114 3.7845 7 6.7282 6.4720 6.230360021 5.7864 5.5824 5.3893 5.2064 5.0330 48684 4.5638 4.1604 8 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 59713 5.74665.5348 53349 4.9676 4.4873 9 85660 8.1622 7.7861 7.4353 7.1078 6.8017 65152 6.2469 59952 57590 53282 4.7716 10 94713 8.9826 85302 81109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 56502 5.0188 11 10.3676 9.7868 9.2526 87605 83064 7.8869 7.4987 7.1390 6.8052 6495 5.9377 5.2337 12 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 79427 7.5361 7.1607 6.8137 6.1944 5.4206 13 12.1337 11.3484 106350 99856 9.3936 8.8527 83577 9038 7.4869 7.1034 64235 5.5831 14 13.0037 12.1062 112961 10.5631 9.8986 9.2950 87455 8.2442 7.7862 7.3667 66282 5.7245 5 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.60616.8109 58474 6 14.7179 13.5777 12.5611 116523 10.8378 10.1059 94466 8.8514 8.3126 78237 6.9740 5.9542 7 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 97632 9.1216 8.5436 8.02167.1196 6.0472 18 16.3983 14.9920 13,7535 126593 116896 10.8276 100591 9319 8.7556 8.2014 72497 6.1280 19 17.2260 15.6785 143238 131339 12.085 111581 10.3356 9.6036 8.9501 8.3649 7.3658 61982 20 18.0456 16.3514 14.8775 135903 12.4622 11.4699 105940 9.8181 9.1285 8.5136 74694 6.2593 22.0232 19.5235 174131 156221 14.0939 12.7834 116536 10.6748 9.8226 9.0770 7.8431 6461 0 258077 22.3965 19.6004 172920 15.3725 13.7648 4090 11.2578 10.2737 94269 8.0552 6.5660 35 29,4086 24.9986 21.4872 18666 6.3742 4.4982 129477 116546 10.5668 9.6442 8.1755 66166 40 32.8347 273555 23.1148 9798 1791 133317 1946 10.7574 9.7791 82438 66418 Used to cakculake the peewe nt value of a series of oqual payments made at the end of each period. For example: What is the pesent value of $2.000 anannual interest r of9%. For (n-10,is9%),the P per year for l10 years assaming S2.000 per yearfor10years the equivalent of $12.83 5today (S2000x64177). V tor is 6.4177 Future Value of an Annuity of 1 Perlods 1% 7% 10% 12% 15% 0000 1.0000 1.0000 0000 1.0000 1.0000 1.0000 1.0000 10000 10000 10000 220100 20200 2.0300 2.0400 2.0500 20600 2.0700 2.0800 2.0900 2.1000 2.1200 2.1500 3 3.0301 30604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3744 3.4725 4.0604 4.1216 4.1836 4.2465 43101 43746 4.4399 45061 4.5731 4.6410 47793 4.9934 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.7424 6 6.1520 6.3081 6.4684 6.6330 6.8019 69753 7.1533 7.3359 7.5233 7.7156 8.1152 8.7537 7 7.2135 7.4343 7.6525 7.8983 8.1420 8.39 8 8.2857 85830 8.8923 9.2142 9.5491 98975 10.2598 10.6366 110285 11.4359 122997 13.7268 9 9.3685 97546 10.1591 10.5828 110266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 16.7858 10 10.4622 10.9497 11.4639 120061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11 11.5668 12.1687 128078 13.4864 14.2068 14.9716 15.7836 16.6455 17.5603 18.5312 20.6546 24.3493 12 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 29.001 3 13.8093 146803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 245227 28.0291 34.3519 14 149474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16.0969 17.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 6 17.2579 186393 20.1569 218245 236575 25.6725 27.8881 30.3243 330034 359497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 337502 369737 40.5447 48.883765.0751 18 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 634397 88.2118 20 220190 24.2974 26.8704 29.7781 330660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 25 282432 32.0303 36.4593 41.6459 7.7271 548645 632490 73.1059 84.7009 98.3471 1333339 212.7930 30 34.7849 40.5681 47.5754 56.0849 66.4388 79.0582 944608 1132832 136.3075 1644940 241.3327 434.7451 35 41.6603 49.9945 60.4621 73.6522 90.3203 111.4348 1382369 1723168 2157108 2710244 431.6635 881.1702 40 48.8864 604020 75.4013 95.0255 120.7998 1547620 199 6351 259 0565 337.8824 442 5926 7670914 1,779.0903 Used to calculate the future value of a series of equal payments made at the end of each period or example: What is the futue vase of 54,000 per year for 6 yean assuming an annual interest rate of KS. For d"-6.i-8%), FV factor is 73359 S4,00 per year fr 6jenaccumulanes to S2934MO (S4,00 x73359)