exhibit 14B-1
exhibit 14B-2
Lukow Products is investigating the purchase of a piece of automated equipment that will save $150,000 each year in direct labor and inventory carrying costs. This equipment costs $860,000 and is expected to have a 6-year useful life with no salvage value. The company's required rate of return is 14% on all equipment purchases. Management anticipates that this equipment will provide intangible benefits such as greater flexibility and higher-quality output that will result in additional future cash inflows. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table. Required: 1. What is the net present value of the piece of equipment before considering its intangible benefits? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $860,000 investment? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Periods 2 0 ppmmwwwa3mm 5% 6s 9 17 20 - 09:095003 005 09:00 90 0 0 500 00:05 0840840 0 0 0 0 0 0 0 0925,0907 past 0 0857 08:086 0 000,086 0743 01 07 on 16 06-1 1541 090EE, 40 06 004 02 05 10 06 024 06 0593 05 05 05 0530524 05 085 083 1792 0763 070706 063060635 0 05:092 058 0534 0516 049 09: 0467 0451 0 042 00 0820784 0747 0 06 1650 06/09 1367 0513 059 007 0476 046 0470419 0402 05300 010 0394 01/07 000 0746 0/05 OULD 0630 150564 01-07 0430 0456 04-22 0410 0390 0370 0552 0335 030 0.00 02 02-02 07 006 062 086 0547 052 04:1452 0425 0400 0376 0354 0339 034 0796 079 0200 0249 02 0722 070 03 06/06 052 0.540 002 0407 0 0404 0376 0341 0327 0305 02 020 029 02 026 0204 0101 01 010 0/03 0045 05120644 0800 040 0424 03 136 0311 02300 0204 02 074) 025 0.20 090 0 007 0199044 4134 6070 06 05500KW 640) 0422 00003530322 0 0270 02170227 02W01 0140 0 0 0 007 0 0 05052 0 0429 0 0 0 0 07/06 0 0 01 01/ 0620 004 012 0 0100,000CG 0625 0457 07,0441 0.3970316 0319 021000237 0231 0200 0 0 0152 007 024 0 0402 00g 000006 000 0 EDIT 0530 0 400 0 00NL 0326 02 02 0220 0 0 02 010 01010 016 010 0000 0004 00000W 0 0044 05 0505 0442 0 0 0.340 029 023 07320205 QNO 012 0 0000 0 0 000,000000e2006 0 0 004 0555 0.48 0.0362015 0275 020 0 200 0 0160 0 40 0 0 0 0005 00MM 007 0065 005 00510049,000 0015 0594 0458 0394 039 0292 0262 0 0610 023 07070001 00:00 002 006 0047 002 0000 002 000 05 010 01 03 02.10 0231 0960170 0 0125 01CG 006 000 0060 000 0052 005 000 004 0030 0020 0029 0 0 0 150 006 220 0212 0190 053 000 0005 001 0069 0059 004 0044 009 007 0020 00274 000 000 045 0 0 0 02 022 0194 2164 096 0 009 003 0070 0060 0051000 000 001 002 0023 0020 007 004 08 0 0320258 025 07 0799.012 010 0007 009 000 0.05) 00000 0 0026 0022 0 006 004 00 049 0359 0204 029209 1DH01350Hz 009 007 004 0053 004 007 00 0.026 0022 006 0.05 000 001 COM 0422 0342020226 0 0150 0123 010 008 008 0066 005 008 0012 0026 0.022 006.00% 0 0 000 000) 006 0320 026 0:00 012 01/2 009 0074 000 0049 0040 007 002) 0022 0.0 006 00000,0000 0.00 0 CMOS 10 00 1247 097010 026 002 002 006 0.05 0047 0 008 002009 005 ad 000 0.COME 000 0 006 000- 0.75 0296 0210 NIAL 0 0092 007 009 004700m 000 0024 0020 006 0 0 000 0009 0.00 0000 DNS OOO 0351 02 0220 0 0195 0406 0004 0066 005 0.042 0 0026 0.02 0 0 0 0.0" 009 0007 0006 0005 0 COM Quee 027 0 07070161 025 00% 0026 0060 007 007 0029 0023 006 0000H 2.DOS 0 007 0000,0005 000h 0m 0002 0 02-16 076 050 016 0.00 0.06 006 0042 60 0026 0020 006 002 000 0.00 2006 0006 0004 0000 0 0002 030701 QE507 007 002 006 004 1037 109 0.022 007 0MM 00T 0.000 0.006 0006 00MM DONG 002 000g oppe 03 07 174 0099 005 005 004 000026 0020 005 000009 0007 0 005 004 000g on DC02 0 000 02001 009/000046 002 0022 005 0.0" 0008 006 0004 0000 000 do 0001 0001 000 0009 0000 0000 0000 EXHIBIT 48-2 Patent Value of an Annuity of $1 in Arrear ON Periods 7 8 2 YON th 1 0.962 0.952 0943 193 19 20 0.935 0.926 0907 (1909-0.901 0893 0.885 0877 0.870 0362 0555 0347 0.840 0.000 0.826 0.820 0.01 0.000 0.000 24 25 2 1896 1859 1.833 1.808 1783 1750 1730 1713 1690 1058 647 1626 1605 1585 1506 15171528150914921414571440 3 2.775 27232073 2.624 2577 2531 247 2.444 2402 2.381 2322 2280 2246 2210 2174 2.540 2.500 2.074 2012 2011 10019 4 3.630 35483465 3.381 3.312 3240 5170 3102 3037 2.974 295 2855 2.798 273 2690 2.609 2589 2540 2494 2448 2.104 2360 5 4452 4329 4.212 4100 3.993 3990 2013096 3.605 35171433 3.352 3274 3199 3127 1050 2991 2926 2564 2003 2145 2689 5.242 5026 4917 4767 4.623 4486 4355 4231 411 3.998 3.889 3784 3.885 3.509 3.490 3.40 2.326 3205 315 3092 10202941 7 6.002 5.786 5.582 5.399 5.205 5033 48684712 4564 4423 4.288 4.100 4039 39223812 37063505 1508 1416 3.327 3242 1181 6733 6.663 6.210 5.971 570 5535 5335 5146 4.968 47994639 4487 4344 4207 407 3954 337 3726 3619 3518 341 3329 9 7.435 7108 6.802 6515 6.247 5.995 5759 5.537 5328 5132 49.16 4772 4.607 4451 4303 4563 4.031 3905 3.796 2673 1506 1.453 10 0:1 7722 7360 7024 6710 6.418 6.145 5.889 5650 5.426 5215 5019 4833 4659 4.494 43394192 4.054 1923 3.799 3682 3571 11 8.760 8.306 7887 7,499 709 6.305 6.495 6.207 5.938 5687 5.453 5.234 5029 436 4656 4.636 4327 47 4005 3.902 3776 3656 12 9.385 063 8.354 7943 7536 7961 6.814 6492 6194 5918 5550 5.421 5197 4.988 4793 4.671 409 42794.127 29853851 3725 9.986 9.394 9.853 8.358 7904 7487 7103 6.750 6.424 622 5.8425.583 5342 5158 4910 4715 4533 432 4200 40532 3700 14 10.563 9.899 9.295 8745 8.244 2786 7367 6982 6 628 6.302 6002 5.724 5.468 5229 5008 402 40 4.432 426541093052 3824 15 10.380 9.712 9.00 B590 8.061 7606 7191 6.811 6.462 632 5847 5575 5.324 50924076 4675 4.489 4.35 4001 1959 16 11652 108 10906 9447 8851 3313 7.824 7379 6914 5.604 6.265 5 954 5608 5.4055152 4.930 473045364357 4199 40331687 12 12.166 11274 10.477 9763 9122 8.544 B022 7549 7120 6.7296.373 6047 579 5.475 5.222 4.990 4775 4576 491 419 40503910 18 12.859 11.090 10828 10.059 9.372 8.756 8.201 7702 7250 6.540 6.467 6128 5.818 5534 5.2735033 48124608 4.419 420 40003928 19 13.034 12.085 11158 10.336 9604 8950 8.365 7839 7366 6938 6550 6198 5877 5584 5.318 5.0704534635 4442 4203 408 3942 20 3500 12 462 11.470 10594981 9129 8.5142963 7489702566226.259 5.929 5.629 5353 5101 4870 46574460427940 3954 21 14.029 12.521 11754 10.836 10.017 9292 8.649 8075 75627102 6687 6.3125.973 5665 5.384 5127 4.991 4675 476 4292 41213163 22 14451 163 12042 1061 10 201 9442 87728.176 7645 2170 60 6.359 6 011 5.60 5410 5149 4909 460 4.45843024303970 23 14857 1.499 12.303 1272 10.371 9580 8.833 8.2667718 7.230 6792 6.399 6044 5723 5.432 5167 4995 4.700 4499 431 407 350 24 15 247 1799 12.550 1148990.529 9707 B 905 3482784 7283 6.305 6.04 60735746 5.451 5182 4.937404507 418 41901 25 15622 14.094 12,783 1654 106759823 9.077 8.422784373306872 6454 6.097 5.766 5467 51954948 4721 4511 4123 4547 20 15.903 4375 300311826 10 810 9929 9.101 8.4887896 7372 6906 6.491 6118 570 54805 206 495647284520 421 481 27 16 330 14643 1211 1987 10 935 10.027 9.237 8.548 79437409 6935 6.546.038 5790 5.092 521549544734 2524 433241543990 16663 548983408 2007 10:15 11051 9.307 36027984 7441 1.99 6.961 6.534 6152 5.810 5502 52234970 433945284054157 29 16.984 15.141 13.500 12.278 11158 10198 9.370 8.650 1.0227.470 6983 6.551 6166 5.620 5510 5229 450 4531433745593994 30 17.292 15372 0755 2.409 91258 102749.427 8.694 8.055 749670036.566 6:177 5.829 5.50 5.235497947462534 4330 60 3006 19.79317150 15046 1133211925 90757 9779895132442634 2105 66028230 5.271 55485258 4997 4.700 454 437 438 1999 119
