Greyson Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Philadelphia, Pennsylvania. The solar panel project would cost $475,000 and would provide cost savings in its utility bills of $40,000 per year. It is anticipated that the solar panels would have a life of 15 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.) = Payback period Accounting rate of retum Expected annual net cash inflow Future value Initial investment Net present value Present value Residual value Total net cash inflows Requirements 1. Calculate the payback period in years of the solar panel project. 2. If the company uses a discount rate of 10%, what is the net present value of this project? 3. If the company has a rule that no projects will be undertaken that have a payback period of more than five years, would this investment be accepted? If not, what arguments could the energy manager make to try to obtain approval for the solar panel project? 4. What would you do if you were in charge of approving capital investment proposals? Print Done Reference Future Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 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 2.200 345 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 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 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 19 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 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 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 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 10 12 13 14 15 25 30 DUNN GENO 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 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 28.755 32.150 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 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 42.219 48.497 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 37.581 43.672 50.818 59.196 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 60.965 72.035 20 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 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 181.871 356.787 530.312 790.948 1,181.882 249.214 342.603 471.981 40 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 Reference Future Value of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 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 23 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 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 45 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 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 61820 12315 2224 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 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 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 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 1.105 1.219 1.344 1.480 1.629 1.791 2.159 2.594 3.106 3.707 4.411 5.234 6.192 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 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 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 14 1.149 1.319 1.513 1.732 1.980 2.261 2.937 3.797 4.887 6.261 7.988 10.147 12.839 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 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 25 1.282 1.641 2.094 2.666 3.386 4.292 6.848 10.835 17.000 26.462 40.874 62.669 95.396 30 1.348 1.811 2.427 3.243 4.322 5.743 10.063 17.449 29.960 50.950 85.850 143.371 237.376 40 1.489 2.208 3.262 4.801 7.040 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1,469.772 - Reference Present Value of $1 Periods 1% 2% 3% 4% 5% 1 2345 0.980 0.990 0.980 0.971 0.961 0.962 0.952 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 6% 8% 10% 0.943 0.926 0.909 0.890 0.857 0.826 0.840 0.794 0.751 12% 14% 16% 18% 20% 0.893 0.877 0.862 0.847 0.833 0.797 0.769 0.743 0.718 0.694 0.712 0.675 0.641 0.609 0.579 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.636 0.592 0.567 0.519 0.552 0.516 0.482 0.476 0.437 0.402 6 0.942 0.888 0.837 0.790 0.746 0.705 0.630 7 0.933 0.871 0.813 0.760 0.711 0.665 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.564 0.507 0.456 0.583 0.513 0.452 0.400 0.404 0.351 0.361 0.308 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.410 0.354 0.314 0.279 0.305 0.266 0.233 0.263 0.225 0.194 0.227 0.370 0.335 0.191 0.162 12345 2224 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 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 25 0.780 0.610 0.478 30 0.742 0.552 0.412 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 40 0.672 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Reference Present Value of Annuity of $1 Periods 1% 1 2345 4.853 2% 0.990 0.980 0.971 1.970 1.942 1.913 1.886 2.941 2.884 2.829 2.775 3.902 3.808 3.717 3.630 4.713 4.580 4.452 3% 4% 5% 8% 0.962 6% 10% 12% 14% 16% 18% 20% 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 1.859 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 3.889 3.685 3.498 4.288 3.326 4.039 3.812 3.605 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.759 5.328 5.650 4.639 4.344 4.078 4.946 4.607 4.303 4.031 5.216 4.833 4.494 4.192 3.837 11 12275 2234 10.368 9.787 9.253 8.760 8.306 7.887 7.139 11.255 10.575 9.954 9.385 8.863 8.384 7.536 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 14 13.004 12.106 11.296 10.563 9.899 9.295 13.865 12.849 11.938 11.118 10.380 9.712 6.495 5.938 6.814 6.194 7.103 6.424 8.244 7.367 8.559 5.453 5.660 5.029 4.656 4.327 5.842 5.197 4.793 5.342 4.910 4.533 6.628 6.002 5.468 5.008 4.611 7.606 6.811 6.142 5.575 5.092 4.675 4.439 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 25 22.023 19.523 17.413 15.622 14.094 12.783 30 25.808 22.396 19.600 17.292 15.372 13.765 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 8.514 7.469 6.623 10.675 9.077 7.843 6.873 5.929 5.353 4.870 6.097 5.467 4.948 11.258 9.427 8.055 7.003 6.177 5.517 4.979 9.779 8.244 7.105 6.233 5.548 4.997