Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

George Robinson owns a garage and is contemplating purchasing a tire retreading machine for $19,820. After estimating costs and revenues, George projects a net cash

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
George Robinson owns a garage and is contemplating purchasing a tire retreading machine for $19,820. After estimating costs and revenues, George projects a net cash inflow from the retreading machine of $4,000 annually for 7 years. George hopes to earn a return of 8% on such investments. What is the present value of the retreading operation? (For calculation purposes, use 5 decimal places as displayed in the foctor table provided, eg. 5.27541. Round answer to 2 decimal places, e.s. 25.25.) Present value Should Gcorge purchase the retreading machine? George purchase the tire retreading machine. TABLE 1 Future Value of 1 TABLE 2 Future Value of an Annuity of 1 \begin{tabular}{|l|lllllllll|l|} \hline 11 & 13.48635 & 14.20679 & 14.97164 & 15.7836 & 16.64549 & 17.56029 & 18.53117 & 19.56143 & 20.65458 & 24.34928 \\ \hline 12 & 15.02581 & 15.91713 & 16.86994 & 17.8885 & 18.97713 & 20.14072 & 21.38428 & 22.71319 & 24.13313 & 29.00167 \\ \hline 13 & 16.62684 & 17.71298 & 18.88214 & 20.1406 & 21.49530 & 22.95339 & 24.52271 & 26.21164 & 28.02911 & 34.35192 \\ \hline 14 & 18.29191 & 19.59863 & 21.01507 & 22.5505 & 24.21492 & 26.01919 & 27.97498 & 30.09492 & 32.39260 & 40.50471 \\ \hline 15 & 20.02359 & 21.57856 & 23.27597 & 25.1290 & 27.15211 & 29.36092 & 31.77248 & 34.40536 & 37.27972 & 47.58041 \\ \hline \end{tabular} Present Value of 1 TABLE 4 Present Value of an Annuity of 1 \begin{tabular}{|l|lllllllll|l|} \hline 16 & 11.65230 & 10.83777 & 10.10590 & 9.44665 & 8.85137 & 8.31256 & 7.82371 & 7.37916 & 6.97399 & 5.95424 \\ \hline 17 & 12.16567 & 11.27407 & 10.47726 & 9.76322 & 9.12164 & 8.54363 & 8.02155 & 7.54879 & 7.11963 & 6.04716 \\ \hline 18 & 12.65930 & 11.68959 & 10.82760 & 10.05909 & 9.37189 & 8.75563 & 8.20141 & 7.70162 & 7.24967 & 6.12797 \\ \hline 19 & 13.13394 & 12.08532 & 11.15812 & 10.33560 & 9.60360 & 8.95012 & 8.36492 & 7.83929 & 7.36578 & 6.19823 \\ \hline 20 & 13.59033 & 12.46221 & 11.46992 & 10.59401 & 9.81815 & 9.12855 & 8.51356 & 7.96333 & 7.46944 & 6.25933 \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information Systems Control And Audit

Authors: Ron Weber

1st Edition

0139478701, 978-0139478703

More Books

Students also viewed these Accounting questions