Expand Your Critical Thinking 25-02 a-c Hawke Skateboards is considering building a new plant. Bob Skerritt, the company's marketing manager, is an enthusiastic supporter of the new plant. Lucy Liu, the company's chief financial officer, is not so sure that the plant is a good idea. Currently, the company purchases its skateboards from foreign manufacturers. The following figures were estimated regarding the construction of a new plant. Cost of plant $4,720,000 Estimated useful life Annual cash inflows 4,720,000 Salvage value $2,360,000 Annual cash outflows 4,177,000 Discount rate 11% 15 years dly Bob Skerritt believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own skateboards the company will benefit from a "buy American" patriotism that he believes is common among skateboarders. He also notes that the firm has had numerous quality problems with the skateboards manufactured by its suppliers. He suggests that the inconsistent quality has resulted in lost sales, increased warranty claims, and some costly lawsuits. Overall, he believes sales will be $236,000 higher than projected above, and that the savings from lower warranty costs and legal costs will be $71,000 per year. He also believes that the project is not as risky as assumed above, and that a 9% discount rate is more reasonable. Click here to view the factor table Answer each of the following Your answer is correct. Compute the net present value of the project based on the original projections. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses 9. (45). Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 5,275.) Net present value 322108 Should the project be accepted? The project should be related Your answer is partially correct. Try again. Compute the net present value incorporating Bob's estimates of the value of the intangible benefits, but still using the 11% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Net present value 864385 Should the project be accepted? The project should be accepted LINK TO TEXT Your answer is correct. Compute the net present value using the original estimates, but employing the 9% discount rate that Bob suggests is more appropriate. (If the net present value is negative, use either a negative sign preceding the number e.g.-45 or parentheses e.g. (45). Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, 0.9. 5,275.) Net present value 304863 Should the project be accepted? The project should be accepted Click if you would like to Show Work for this question: Deen Show Work Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .96154 95238 94340 93458 92593 9174390909 90090.89286.86957 2 92456 90703.89000 .87344 85734 .84168 82645.81162 7971975614 3 .88900686384 .83962 .81630.79383.77218 75132.73119 71178.65752 4 .85480 82270 .79209.76290 .73503 70843.68301.65873.63552 57175 5 .82193 78353.74726 71299.68058 .64993.62092.59345 56743 49718 6 .79031 .74622 70496 .66634.63017 59627 56447 53464 .50663 43233 7 .75992 .71068 .66506.62275 5834954703 51316 48166 45235 37594 8 .73069 .67684 62741 5820154027 50187 .46651.433934038832690 9 .70259.64461 59190 54393 5002546043.42410 39092 36061 28426 10 .67556.61391 55839.50835.46319 42241 .38554 35218 32197.24719 11 .64958 58468 52679.4750942888 38753 3504931728 28748 21494 12 .62460 .55684 49697 44401 .39711 35554 31863 28584 25668 .18691 13 .60057 .53032.46884 .41496 36770 32618 28966 25751 .22917 .16253 14 .57748 50507 44230 38782 34046 29925.26333 .23199 20462.14133 15 55526 48102 .41727 .36245 31524 27454 2393920900.1827012289 16 .53391 .45811 .39365.33873 29189 25187 .21763 .18829 .16312 .10687 17 .51337 .43630 37136 31657 .27027 23107.19785 .16963 .14564 09293 18 .49363 41552 35034 .29586 -25025 21199 .17986 .15282 13004 .08081 19 47464 39573 .33051 .27615 23171 .19449.16351 13768 .11611 .07027 20 .45639 37689 31180 25842 21455 .17843.14864 12403 10367 106110 Paymeny 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 2.10000 2.11000 2.12000 2.15000 3 3.12160 3.15250 3.18360 3.2149 3.24640 3.27810 3.31000 3.34210 3.37440 3.47250 4 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5 5.41632 5.52563 5.63709 5.7507 5.86660 5.98471 6.10510 6.22780 6.35285 6.74238 6 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 791286 8.11519 8.75374 7 7.89829 8.14201 8.39384 8.6540 8.92280 9.20044 9.48717 9.78327 10.08901 11.06686 8 9 10.2598 10.6366311.0284711.4358911.8594312.29969 9.21423 9.54911 9.89747 13.7268 10.5828011.0265611.4913211.9780 12.4875613.0210413.5794814.1639714.77566 16.78584 12.0061112.5778913.1807913.8164 14.4865615.1929315.9374316.7220117.54874 20.30372 13.4863514.2067914.9716415.7836 16.6454917.5602918.5311719,5614320.65458 24.34923 10 11 12 15.0258115.9171316.8699417.8885 18.9771320.1407221.3842822.7131924.13313 29.0016: 16.6268417.7129818.8821420.1406 21.4953022.9533924.5227126.2116428.02911 34.3519 13 14 18.2919119.5986321.0150722.5505 24.2149226,0191927.9749830.0949232.39260 13 use either a nega decimal places, es 14 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 1.73168 1.97993 2.26090 2.57853 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 1.80094 2.07893 2.39656 2.75903 3.17217 3.64248 4.17725 4.78459 5.47357 8.13706 15 16 1.87298 2.18287 2.54035 2.95216 3.42594 3.97031 4.59497 5.31089 6.13039 estion: Qoon Show w Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 0 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1 1.04000 1.05000 1.06000 1.07000 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000 2 1.08160 1.10250 1.12360 1.14490 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 3 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 4 1.16986 1.21551 1.26248 1.31080 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901 1.21665 1.27628 1.33823 1.40255 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 5 6 1.26532 1.34010 1.41852 1.50073 1.58687 1.67710 1.77156 1.87041 1.97382 2.31306 7 1.31593 1.40710 1.50363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 2.66002 8 1.36857 1.47746 1.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 E 3.05902 9 1.42331 1.55133 1.68948 1.83846 1.99900 2.17189 2.35795 2.55803 2.77308 3.51788 10 1.48024 1.62889 1.79085 1.96715 2.15892 2.36736 2.59374 2.83942 3.10585 4.04556 11 1.53945 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 4.65239 est 12 1.60103 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 3.49845 3.89598 5.35025 13 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.88328 4.36349