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Grant Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Buffalo, New York. The solar panel project would cost $600,000 and would provide cost savings in its utility bills of $50,000 per year. It is anticipated that the solar panels would have a life of 20 years and would have no residual value. Read the requirements. (Click the icon to view the present value factor table.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the future value factor table.) (Click the icon to view the future value annuity factor table.) Requirement 1. Calculate the payback period in years of the solar panel project. Determine the formula, then calculate the payback period. (Round your answer to two decimal places.) $ Initial investment 600,000 Expected annual net cash inflow 50,000 = Payback period 12.00 years Requirement 2. If the company uses a discount rate of 12%, what is the net present value of this project? (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 project is Present Value of $1 Periods 1% 2% 3% 4% Period 1 0.990 0.980 0.971 5% 0.962 0.952 6% 8% 10% 0.943 0.926 0.909 12% Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.857 0.826 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 Period 4 Period 5 0.961 0.951 0.906 0.924 0.888 0.855 0.823 0.863 0.822 0.784 0.747 0.681 0.792 0.735 0.683 0.621 0.893 0.797 0.769 0.743 0.718 0.694 0.712 0.675 0.641 0.609 0.579 0.636 0.592 0.552 0.516 0.482 0.567 0.519 0.476 0.437 0.402 0.877 0.862 0.847 14% 16% 18% 20% 0.833 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 0.335 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 0.279 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 0.233 Period 9 0.914 Period 10 0.905 0.820 0.744 0.676 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 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 0.135 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.290 0.263 0.205 0.239 0.183 0.208 0.112 0.229 0.182 0.145 0.116 0.093 0.160 0.125 0.099 0.078 0.140 0.108 0.084 0.065 0.168 0.137 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 Period 30 0.742 0.552 0.412 0.308 0.231 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.174 0.099 0.046 0.149 0.104 0.073 0.051 0.037 0.026 0.092 0.059 0.038 0.024 0.016 0.010 0.057 0.033 0.020 0.012 0.007 0.004 0.022 0.011 0.005 0.003 0.001 0.001 Present Value of Annuity of $1 Periods 1% Period 1 0.990 Period 2 1.970 Period 3 2.941 Period 4 3.902 Period 5 4.853 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 2% 3% 4% 5% 6% 8% 10% 12% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 14% 16% 18% 20% 0.877 0.862 0.847 0.833 1.647 2.322 1.605 1.566 1.528 2.246 2.174 2.106 2.914 2.798 2.690 2.589 3.433 3.274 3.127 2.991 5.601 5.417 5.242 6.472 6.230 6.002 8.162 7.786 8.983 8.530 7.325 7.020 6.733 7.435 8.111 Period 10 9.471 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 5.660 5.197 4.793 5.842 5.342 4.910 4.533 6.002 5.468 5.008 4.611 6.142 5.575 5.092 4.675 6.623 5.929 5.353 4.870 6.097 5.467 4.948 5.517 4.979 6.233 5.548 4.997 6.873 7.003 7.105 6.177 5.076 4.917 4.623 4.355 4.111 5.786 5.582 5.206 4.868 4.564 6.463 6.210 5.747 5.335 4.968 7.108 6.802 6.247 5.759 5.328 7.722 7.360 6.710 6.145 5.650 3.889 3.685 3.498 3.326 4.288 4.039 3.812 3.605 4.639 4.344 4.078 3.837 4.946 4.607 4.303 4.031 5.216 4.833 4.494 4.192 5.453 5.029 4.656 4.327 4.439 Future Value of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 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 Period 4 1.041 1.082 1.126 1.170 1.216 1.262 1.360 Period 5 1.051 1.104 1.159 1.217 1.276 1.338 1.331 1.405 1.464 1.574 1.689 1.469 1.611 1.762 1.925 1.482 1.561 1.643 1.728 1.811 1.939 2.074 2.100 2.288 2.488 Period 6 1.062 1.126 1.194 1.265 1.340 1.419 Period 7 1.072 1.149 1.230 1.316 1.407 1.504 Period 8 1.083 1.172 1.267 1.369 1.477 1.594 Period 9 1.094 1.195 1.305 1.423 1.551 1.689 Period 10 1.105 1.219 1.344 1.480 1.629 1.791 2.159 1.587 1.772 1.974 1.714 1.949 2.211 1.851 2.144 2.476 1.999 2.358 2.773 3.252 2.594 3.106 3.707 2.195 2.502 2.826 2.436 2.700 2.986 3.185 3.583 2.853 3.278 3.759 4.300 3.803 4.435 4.411 5.160 5.234 6.192 Period 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 Period 12 1.127 1.268 1.426 1.601 1.796 2.012 2.518 2.853 3.138 Period 13 1.138 1.294 1.469 1.665 1.886 2.133 2.720 Period 14 1.149 Period 15 1.161 Period 20 1.220 1.319 1.513 1.732 1.980 2.261 2.937 1.346 1.558 1.801 2.079 2.397 3.172 4.177 3.479 4.226 3.896 4.818 5.936 3.452 4.363 5.492 6.886 8.599 10.699 3.797 4.887 6.261 7.988 10.147 12.839 5.474 7.138 9.266 11.974 15.407 5.117 6.176 7.430 7.288 8.916 1.486 1.806 Period 25 Period 30 1.348 1.811 1.282 1.641 2.094 2.427 Period 40 1.489 2.208 3.262 2.191 2.653 2.666 3.386 3.243 4.322 4.801 7.040 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 4.292 6.848 10.835 17.000 26.462 40.874 62.669 95.396 5.743 10.063 17.449 29.960 50.950 85.850 143.371 237.376 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1,469.772 Future Value of Annuity of $1 Periods 1% 2% 3% 4% Period 1 1.000 1.000 1.000 1.000 5% 6% 8% 10% 12% 14% 1.000 1.000 1.000 1.000 1.000 1.000 16% 18% 20% 1.000 1.000 1.000 Period 2 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 Period 3 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.640 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 5.215 5.368 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 Period 6 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.930 Period 7 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12.916 Period 8 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 14.240 15.327 16.499 Period 9 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17.519 19.086 20.799 Period 10 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 19.337 21.321 23.521 25.959 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 23.045 25.733 27.271 32.089 37.581 43.842 28.755 32.150 30.850 34.931 39.581 36.786 42.219 48.497 43.672 50.818 59.196 51.660 60.965 72.035 Period 20 Period 25 Period 30 Period 40 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 249.214 342.603 471.981 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 530.312 790.948 1,181.882 48.886 60.402 | 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343.858