Glamour Music is considering investing $725,000 in private lesson studios that will have no residual value. The studios are expected to result in annual net cash inflows of $120,000 per year for the next nine years. Assuming that Glamour Music uses a 10% hurdle rate, what is the net present value (NPV) of the studio investment? Is this a favorable investment? (Click the icon to view the present value of an annuity table.) (Click the icon to view the present value table) (Click the icon to view the future value of an annuity table.) (Click the icon to view the future value table.) (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) The net present value of the studio investment is

\begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.926 & 0.909 & 0.893 & 0.877 & 0.862 & 0.847 & 0.83 \\ Period 2 & 0.980 & 0.961 & 0.943 & 0.925 & 0.907 & 0.890 & 0.857 & 0.826 & 0.797 & 0.769 & 0.743 & 0.718 & 0.69 \\ Period 3 & 0.971 & 0.942 & 0.915 & 0.889 & 0.864 & 0.840 & 0.794 & 0.751 & 0.712 & 0.675 & 0.641 & 0.609 & 0.57 \\ Period 4 & 0.961 & 0.924 & 0.888 & 0.855 & 0.823 & 0.792 & 0.735 & 0.683 & 0.636 & 0.592 & 0.552 & 0.516 & 0.48 \\ Period 5 & 0.951 & 0.906 & 0.863 & 0.822 & 0.784 & 0.747 & 0.681 & 0.621 & 0.567 & 0.519 & 0.476 & 0.437 & 0.40 \\ Period 6 & 0.942 & 0.888 & 0.837 & 0.790 & 0.746 & 0.705 & 0.630 & 0.564 & 0.507 & 0.456 & 0.410 & 0.370 & 0.33 \\ Period 7 & 0.933 & 0.871 & 0.813 & 0.760 & 0.711 & 0.665 & 0.583 & 0.513 & 0.452 & 0.400 & 0.354 & 0.314 & 0.27 \\ Period 8 & 0.923 & 0.853 & 0.789 & 0.731 & 0.677 & 0.627 & 0.540 & 0.467 & 0.404 & 0.351 & 0.305 & 0.266 & 0.23 \\ Period 9 & 0.914 & 0.837 & 0.766 & 0.703 & 0.645 & 0.592 & 0.500 & 0.424 & 0.361 & 0.308 & 0.263 & 0.225 & 0.19 \\ Period 10 & 0.905 & 0.820 & 0.744 & 0.676 & 0.614 & 0.558 & 0.463 & 0.386 & 0.322 & 0.270 & 0.227 & 0.191 & 0.16 \\ Period 11 & 0.896 & 0.804 & 0.722 & 0.650 & 0.585 & 0.527 & 0.429 & 0.350 & 0.287 & 0.237 & 0.195 & 0.162 & 0.13 \\ Period 12 & 0.887 & 0.788 & 0.701 & 0.625 & 0.557 & 0.497 & 0.397 & 0.319 & 0.257 & 0.208 & 0.168 & 0.137 & 0.11 \\ Period 13 & 0.879 & 0.773 & 0.681 & 0.601 & 0.530 & 0.469 & 0.368 & 0.290 & 0.229 & 0.182 & 0.145 & 0.116 & 0.09 \\ Period 14 & 0.870 & 0.758 & 0.661 & 0.577 & 0.505 & 0.442 & 0.340 & 0.263 & 0.205 & 0.160 & 0.125 & 0.099 & 0.07 \\ Period 15 & 0.861 & 0.743 & 0.642 & 0.555 & 0.481 & 0.417 & 0.315 & 0.239 & 0.183 & 0.140 & 0.108 & 0.084 & 0.06 \\ \hline \end{tabular} Glamour Music is considering investing $725,000 in private lesson studios that wil have no residual value The studios are expected to result in annual net cash inflows of $120,000 per year for the noxt nine years. Assuming that Glamour Music uses a 10\% hurdlo thto, what is the net present value (NPV) of the studio investment? 15 this a tavorable inwestment? (Click tha icon to vilaw the present value of an annuly table) (Click the kon lo view the peresent value table) (Click the icon to viow the futuro value of an annility table) (Click the icon to view the future value table.) (Round your angwer to the nearest whole dolls. Use parontheses or a minus sign for a negative net present value.) \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 1.010 & 1.020 & 1.030 & 1.040 & 1.050 & 1.060 & 1.080 & 1.100 & 1.120 & 1.140 & 1.160 & 1.180 & 1.200 \\ Period 2 & 1.020 & 1.040 & 1.061 & 1.082 & 1.103 & 1.124 & 1.166 & 1.210 & 1.254 & 1.300 & 1.346 & 1.392 & 1.440 \\ Period 3 & 1.030 & 1.061 & 1.093 & 1.125 & 1.158 & 1.191 & 1.260 & 1.331 & 1.405 & 1.482 & 1.561 & 1.643 & 1.728 \\ Period 4 & 1.041 & 1.082 & 1.126 & 1.170 & 1.216 & 1.262 & 1.360 & 1.464 & 1.574 & 1.689 & 1.811 & 1.939 & 2.074 \\ Period 5 & 1.051 & 1.104 & 1.159 & 1.217 & 1.276 & 1.338 & 1.469 & 1.611 & 1.762 & 1.925 & 2.100 & 2.288 & 2.488 \\ Period 6 & 1.062 & 1.126 & 1.194 & 1.265 & 1.340 & 1.419 & 1.587 & 1.772 & 1.974 & 2.195 & 2.436 & 2.700 & 2.986 \\ Period 7 & 1.072 & 1.149 & 1.230 & 1.316 & 1.407 & 1.504 & 1.714 & 1.949 & 2.211 & 2.502 & 2.826 & 3.185 & 3.583 \\ Period 8 & 1.083 & 1.172 & 1.267 & 1.369 & 1.477 & 1.594 & 1.851 & 2.144 & 2.476 & 2.853 & 3.278 & 3.759 & 4.300 \\ Period 9 & 1.094 & 1.195 & 1.305 & 1.423 & 1.551 & 1.689 & 1.999 & 2.358 & 2.773 & 3.252 & 3.803 & 4.435 & 5.160 \\ Period 10 & 1.105 & 1.219 & 1.344 & 1.480 & 1.629 & 1.791 & 2159 & 2.594 & 3.106 & 3.707 & 4.411 & 5.234 & 6.192 \\ Period 11 & 1.116 & 1.243 & 1.384 & 1.539 & 1.710 & 1.898 & 2.332 & 2.853 & 3.479 & 4.226 & 5.117 & 6.176 & 7.430 \\ Period 12 & 1.127 & 1.268 & 1.426 & 1.601 & 1.796 & 2.012 & 2.518 & 3.138 & 3.896 & 4.818 & 5.936 & 7.288 & 8.916 \\ Period 13 & 1.138 & 1.294 & 1.469 & 1.665 & 1.886 & 2.133 & 2.720 & 3.452 & 4.363 & 5.492 & 6.886 & 8.599 & 10.699 \\ Period 14 & 1.149 & 1.319 & 1.513 & 1.732 & 1.980 & 2.261 & 2937 & 3.797 & 4.887 & 6.261 & 7.988 & 10.147 & 12.839 \\ Period 15 & 1.161 & 1.346 & 1.558 & 1.801 & 2.079 & 2.397 & 3.172 & 4.177 & 5.474 & 7.138 & 9.266 & 11.974 & 15.407 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & & & & & Present & Value o & Annuit & y of $1 & & & & & & \\ \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% & \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.926 & 0.909 & 0.893 & 0.877 & 0.862 & 0.847 & 0.833 & \\ \hline Period 2 & 1.970 & 1.942 & 1.913 & 1.886 & 1.859 & 1.833 & 1.783 & 1.736 & 1.690 & 1.647 & 1.605 & 1.566 & 1.528 & \\ \hline Period 3 & 2941 & 2.884 & 2829 & 2775 & 2723 & 2.673 & 2577 & 2.487 & 2402 & 2.322 & 2.246 & 2.174 & 2.106 & \\ \hline Period 4 & 3.902 & 3.808 & 3.717 & 3.630 & 3.546 & 3.465 & 3.312 & 3.170 & 3.037 & 2.914 & 2.798 & 2.690 & 2.589 & \\ \hline Period 5 & 4.853 & 4.713 & 4.580 & 4.452 & 4.329 & 4.212 & 3.993 & 3.791 & 3.605 & 3.433 & 3.274 & 3.127 & 2991 & \\ \hline Period 6 & 5.795 & 5.601 & 5.417 & 5.242 & 5.076 & 4.917 & 4.623 & 4.355 & 4.111 & 3.889 & 3.685 & 3,498 & 3.326 & \\ \hline Period 7 & 6.728 & 6.472 & 6.230 & 6.002 & 5.786 & 5.582 & 5.206 & 4.868 & 4.564 & 4.288 & 4.039 & 3.812 & 3.605 & \\ \hline Period 8 & 7.652 & 7,325 & 7.020 & 6.733 & 6.463 & 6.210 & 5.747 & 5.335 & 4.968 & 4.639 & 4.344 & 4.078 & 3.837 & \\ \hline Period 9 & 8.566 & 8.162 & 7.786 & 7.435 & 7.108 & 6802 & 6.247 & 5.759 & 5.328 & 4.946 & 4.607 & 4.303 & 4.031 & \\ \hline Period 10 & 9471 & 8.983 & 8.530 & 8.111 & 7.722 & 7.360 & 6.710 & 6.145 & 5.650 & 5.216 & 4.833 & 4.494 & 4.192 & \\ \hline Period 11 & 10.368 & 9.787 & 9.253 & 8.760 & 8.306 & 7.887 & 7.139 & 6.495 & 5.938 & 5.453 & 5.029 & 4.656 & 4.327 & \\ \hline Period 12 & 11.255 & 10.575 & 9.954 & 9.385 & 8.863 & 8.384 & 7.536 & 6.814 & 6.194 & 5.660 & 5.197 & 4.793 & 4.439 & \\ \hline Period 13 & 12.134 & 11.348 & 10.635 & 9.986 & 9.394 & 8.853 & 7904 & 7.103 & 6.424 & 5.842 & 5.342 & 4.910 & 4.533 & \\ \hline Dorind 14 & | 13mnd & 12.106 & 11296 & in 563 & 0909 & & 8244 & 7.357 & 6.608 & & & 50. & 611 & \\ \hline 4 & & & & & & & & & & & & & 11 & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% & a \\ \hline Period 1 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1000 & 1.000 & 1.000 & \\ \hline Period 2 & 2010 & 2.020 & 2.030 & 2040 & 2050 & 2.060 & 2080 & 2.100 & 2.120 & 2.140 & 2.160 & 2.180 & 2.200 & \\ \hline Period 3 & 3.030 & 3.060 & 3.091 & 3.122 & 3.153 & 3.184 & 3.246 & 3.310 & 3.374 & 3440 & 3.506 & 572 & 1.640 & \\ \hline Period 4 & 4.060 & 4.122 & 4.184 & 4.246 & 4.310 & 4.375 & 4506 & 4.641 & 4.779 & 4921 & 5.066 & 215 & 368 & \\ \hline Period 5 & 5.101 & 5.204 & 5.309 & 5.416 & 5.526 & 5.637 & 5867 & 6.105 & 6.353 & 6.610 & 6.877 & .154 & 442 & \\ \hline Period 6 & 6.152 & 6.308 & 6.468 & 6.633 & 6.802 & 6.975 & 7336 & 7.716 & 8.115 & 8.536 & 8.977 & 442 & 9.930 & \\ \hline Period 7 & 7.214 & 7.434 & 7.662 & 7898 & 8.142. & 8.394 & 8.923 & 9.487 & 10.089 & 10.730 & 11.414 & 12.142 & 12.916 & \\ \hline Period 8 & 8.286 & 8.583 & 8.892 & 9.214 & 9.549 & 9897 & 10.637 & 11.436 & 12.300 & 13233 & 14.240 & 327 & 16.499 & \\ \hline Period 9 & 9.369 & 9.755 & 10.159 & 10.683 & 11.027 & 11.491 & 12.488 & 13.579 & 14.776 & 16.085 & 19 & 86 & 20.799 & \\ \hline Period 10 & 10462 & 10.950 & 11.464 & 12.006 & 12.578 & 13.181 & 14.487 & 15.937 & 17.549 & 19.337 & 21.321 & 23.521 & 25.959 & \\ \hline eriod 11 & 11.567 & 12.169 & 12.808 & 13.486 & 14.207 & 14972 & 16.645 & 18.531 & 20.655 & 23.045 & 25.733 & 28.755 & 32150 & \\ \hline Period 12 & 12.683 & 13.412 & 14.192 & 15.026 & 15.917 & 16.870 & 18.977 & 21.384 & 24.133 & 27.271 & 30.850 & 34.931 & 39.581 & \\ \hline Period 13 & 13.809 & 14.680 & 15.618 & 16.627 & 17.713 & 18882 & 21.495 & 24.523 & 28.029 & 32.089 & 36.786 & 42219 & 48.497 & \\ \hline Period 14 & 14947 & 15.974 & 17086 & 18292 & 19.599 & 21015 & 24.215 & 27.975 & 32393 & 37.581 & 43.672 & 50.818 & 59.196 & \\ \hline Period 15 & 16.097 & 17.293 & 18.599 & 20.024 & 21.579 & 23276 & 27.152 & 31.772 & 37.280 & 43.842 & 51.660 & 60.965 & 72.035 & \\ \hline \end{tabular}