Griffin Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Ann Arbor, Michigan. The solar panel project would cost $625,000 and would provide cost savings in its utility bills of $35,000 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.) Initial investment Expected annual net cash inflow = Payback period years 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Periods 1% 2% Period 1 0.990 0.980 Period 2 0.980 0.961 Period 3 0.971 0.942 Period 4 0.961 0.924 Period 5 0.951 0.906 Period 6 0.942 0.888 Period 7 0.933 0.871 Period 8 0.923 0.853 Period 9 0.914 0.837 Period 10 0.905 0.820 Period 110.896 0.804 Period 12 0.887 0.788 Period 13 0.879 0.773 Period 14 0.870 0.758 Period 15 0 261 0743 0.837 0.790 0.813 0.760 0.789 0.731 0.766 0.703 0.744 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.630 0.665 0.583 0.627 0.540 0.592 0.500 0.558 0.463 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 0.722 0.701 0.681 0.661 0642 0.650 0.625 0.601 0.577 0.555 0.585 0.557 0.530 0.505 0 481 0.527 0.497 0.469 0.442 0417 0.429 0.397 0.368 0.340 0315 0.350 0.319 0.290 0.263 0 230 0.287 0.257 0.229 0.205 183 0.237 0.208 0.182 0.160 0 140 0.195 0.168 0.145 0.125 0108 0.162 0.137 0.116 0.099 084 0.135 0.112 0.093 0.078 0065 Piesent value 2% 5% 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Periods 1% 3% 4% 6% 8% 10% 12% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 Period 6 5.795 5.601 5.417 5.242 5.0764.917 4.623 4.355 4.111 Period 7 6.728 6.4726.230 6.002 5.786 5.5825.206 4.868 4.564 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 Period 9 8.566 8.1627.786 7.435 7.108 6.8026.247 5.759 5.328 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 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 9.3858.863 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 11 038 11 118 | 10 390 9712 8.550 7606 6.811 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.453 5.660 5.842 6.002 6142 5.029 5.197 5.342 5.468 5575 4.656 4.793 4.910 5.008 5002 4.327 4.439 4.533 4.611 4675 Future Value of $1 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 1.116 1.127 1.138 1.149 1 161 1.243 1.268 1.294 1.319 1 346 1.384 1.426 1.469 1.513 1 558 1.539 1.601 1.665 1.732 1 801 1.710 1.796 1.886 1.980 2.079 1.898 2.012 2.133 2.261 2397 2.332 2.518 2.720 2.937 3. 172 2.853 3.138 3.452 3.797 4 177 3.479 3.896 4.363 4.887 5474 4.226 4.818 5.492 6.261 7 138 5.117 5.936 6.886 7.988 9286 6.176 7.288 8.599 10.147 11 974 7.430 8.916 10.699 12.839 15 407 10% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.000 2010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 Period 6 Period 7 Period 8 Period 9 Period 10 6.308 7.434 8.583 9.755 10.950 6.468 6.633 7.662 7.898 8.892 9.214 10.159 10.583 11.464 12.006 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 7.716 8.923 9.487 10.637 11.436 12.488 13.579 14.487 15.937 8. 115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14.240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12.683 13.809 14.947 16.097 12.169 12.808 13.486 14.207 14.972 16.645 18.531 | 20.655 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 15.974 17.086 18.292 | 19.599 | 21.015 24.215 | 27.975 32.393 17 293 18 590 20.02 21 579 22 276 27 152 31 772 | 37 280 23.045 27.271 32.089 37.581 43 242 25.733 30.850 36.786 43.672 51 880 28.755 34.931 42.219 50.818 60065 32.150 39.581 48.497 59.196 72.025 1. Calculate the payback period in years of the solar panel project. 2. If the company uses a discount rate of 12%, 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