Grove Corp is considering the purchase of a new piece of equipment The cost savings from the equipment would result in an annual increase in net income of $201,800 The equipment will have an initial cost of $1,201,800 and have an 8 year life The salvage value of the equipment is estimated to be $201,800 The hurdle rate is 12 Ignore income taxes (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1 ) a What is the accounting rate of return ( Round your answer to 2 decimal places ) uetr ontidaliValeabtTarst, uetr ederswAnis, ontiipcres dab t , 2 6, 0 7 6, llnu 51 l,ul n6 2, 32 e,lsfa 42 1, 0 5, 1 24 1, 1 3, 05 0, 4, seal f8 4, 37 ,0 24 77 1, 64 3 3 2, uetr 45 ,e1tlTiw 20Ne e am n ,e ru t7 4, 14 5, 33 ,6 3 c2, 2 6 c1, 0 10 0 c 9 1, 23 0 59 , N IOSTUE Q 76 5 5, 23 5, uetr 63 5 5, C RIMENU 3 7 29 , 9 7, 25 5 7 0, 9 7, 25 5 7 30 2 0 2 , seonsprer 20beumeNylst 7 ,uetr 43 ,ONTILUSO 6 7 55 ,2 53 2, 21 e,ru t3 6 55 ,ICERUM N 73 9 2, 79 ,) 11A( 75 6 5, 9 7, 75 0 3 2 20 , 3B 1)21, 2063 2017,13b(rg 20orol cndougrckba 8 ,) 11 2023,16, 2037(1gb r 9, N IOSTUE Q 76 5 5, 79 ,rntuRef 20 20oteRa 5 7 30 2 0 2 13 e,lsfa 41 ,n owpDro d 27 1, 5 2, 75 e,lsfa 82 8 2, 22 e,lsfa 35 e,ru t6 3, 55 ,leab 20TedtltiUn 9 6, 37 1, 18 5 5 6 b What is the payback period ( Round your answer to one decimal place ) uetr ontidaliValeabtTarst, uetr ederswAnis, ontiipcres dab t , 2 6, 0 7 6, llnu 51 l,ul n6 2, 32 e,lsfa 42 1, 0 5, 1 24 1, 1 3, 05 0, 4, seal f8 4, 37 ,8 23 77 1, 64 3 3 2, uetr 45 ,e1tlTiw 20Ne e am n ,e ru t7 4, 14 5, 33 ,5 4 c2, 1 5 c1, 0 10 0 c 9 1, 23 0 59 , N IOSTUE Q 76 5 5, 23 5, uetr 63 5 5, C RIMENU 3 7 29 , 9 7, s arYe 5 7 0, 9 7, s arYe 5 7 30 2 0 2 , seonsprer 20beumeNylst 7 ,t ghri 8 6, uetr 43 ,ONTILUSO 6 7 55 ,2 53 1, 21 e,ru t3 6 55 ,ICERUM N 73 9 2, 79 ,) 12A( 75 6 5, 9 7, 75 0 3 2 20 , 3B 1)21, 2063 2017,13b(rg 20orol cndougrckba 8 ,) 11 2023,16, 2037(1gb r 9, N IOSTUE Q 76 5 5, 79 ,odriPek 20acybPa 5 7 30 2 0 2 13 e,lsfa 41 ,n owpDro d 27 1, 5 2, 75 e,lsfa 82 8 2, 22 e,lsfa 35 e,ru t6 3, 55 ,leab 20TedtltiUn 9 6, 37 1, 18 5 5 6 c What is the net present value (Round PV Factor to 4 decimal places Do not round intermediate calculations and round your final answer to the nearest dollar amount ) uetr ederswAnis, ontiipcres dab t , 2 6, 0 7 6, llnu 51 l,ul n6 2, 32 e,lsfa 42 1, 0 5, 1 24 1, 1 3, 05 0, 4, seal f8 4, 37 ,4 26 77 1, 64 3 3 2, uetr 45 ,e1tlTiw 20Ne e am n ,e lsfa 47 1, 54 , 3 3, 54 2 c ,99 1 c ,23 1 c0 19 ,3 2 0 9 5, e ncraleTogetaenrcpee 20nspoes 20rermbNulety s 7, e agntceer p 70 1,0 71 ,t ghri 8 6, uetr 43 ,ONTILUSO 6 7 55 , 24 81 2, 53 e,ru t3 6 55 ,CYENRRCU 3 7 29 , 9 7, 3)(1 A 5 7 56 , 79 , 5 7 30 2 0 2 , ) 3B11 2023,16, 2037(1gb 20rr locod unrokgac b 8, 1)21, 2063 2017,13b(rg 9 ,ONTIESQU 6 7 55 , 9 7, e luVat 20enesPrt 20Ne 5 7 30 2 0 2 13 e,lsfa 41 ,n owpDro d 27 1, 5 2, 75 e,lsfa 82 8 2, 22 e,lsfa 35 e,ru t6 3, 55 ,leab 20TedtltiUn 9 6, 27 1, 18 5 5 6 d What would the net present value be with a 13 hurdle rate (Round PV Factor to 4 decimal places Do not round intermediate calculations and round your final answer to the nearest dollar amount ) uetr ederswAnis, ontiipcres dab t , 2 6, 0 7 6, llnu 51 l,ul n6 2, 32 e,lsfa 42 1, 0 5, 1 24 1, 1 3, 05 0, 4, seal f8 4, 37 ,4 26 77 1, 64 3 3 2, uetr 45 ,e1tlTiw 20Ne e am n ,e lsfa 47 1, 54 , 3 3, 54 2 c ,99 1 c ,23 1 c0 19 ,3 2 0 9 5, e ncraleTogetaenrcpee 20nspoes 20rermbNulety s 7, e agntceer p 70 1,0 71 ,t ghri 8 6, uetr 43 ,ONTILUSO 6 7 55 , 24 81 2, 53 e,ru t3 6 55 ,CYENRRCU 3 7 29 , 9 7, 4)(1 A 5 7 56 , 79 , 5 7 30 2 0 2 , ) 3B11 2023,16, 2037(1gb 20rr locod unrokgac b 8, e ncraleTogetaenrcpe 7 ,getaenrcpe 0 7, 1 01 7, 1)21, 2063 2017,13b(rg 9 ,ONTIESQU 6 7 55 , 9 7, e luVat 20enesPrt 20Ne 5 7 30 2 0 2 13 e,lsfa 41 ,n owpDro d 27 1, 5 2, 75 e,lsfa 82 8 2, 22 e,lsfa 35 e,ru t6 3, 55 ,leab 20TedtltiUn 9 6, 27 1, 18 5 5 6 e Based on the NPV calculations, in what range would the equipments internal rate of return fall ( Round your answer to 2 decimal places ) uetr ontidaliValeabtTarst, uetr ederswAnis, ontiipcres dab t , 2 6, 0 7 6, llnu 51 l,ul n6 2, 32 e,lsfa 42 1, 0 5, 1 24 1, 1 3, 05 0, 4, seal f8 4, 37 ,7 29 77 1, 64 3 3 2, uetr 45 ,e1tlTiw 20Ne e am n ,e ru t7 4, 14 5, 33 ,6 3 c2, 2 6 c1, 7 15 0 c 9 1, 23 0 59 , N IOSTUE Q 76 5 5, 23 5, uetr 63 5 5, C RIMENU 3 7 29 , 9 7, 25 5 7 0, 9 7, 25 5 7 30 2 0 2 , ceaneroleTagntceer 20pseonsprer 20beumeNylst 7 ,getaenrcpe 0 7, 11 7, htig r 68 e,ru t3 4, N IOUTOL S 76 5 5, 23 5, 21 2, uetr 63 5 5, C RIMENU 3 7 29 , 9 7, 5)(1 A 5 7 56 , 79 , 5 7 30 2 0 2 , ) 3B11 2023,16, 2037(1gb 20rr locod unrokgac b 8, 1)21, 2063 2017,13b(rg 9 ,ONTIESQU 6 7 55 , 9 7, n uret 20Rofe 20at 20RalrnteIn 5 7 30 2 0 2 13 e,lsfa 41 ,n owpDro d 27 1, 5 2, 75 e,lsfa 82 8 2, 22 e,lsfa 35 e,ru t6 3, 55 ,leab 20TedtltiUn 9 6, 37 1, 18 5 5 6

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Grove Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in

Grove Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income of $201,800. The equipment will have an initial cost of $1,201,800 and have an 8 year life. The salvage value of the equipment is estimated to be $201,800. The hurdle rate is 12%. Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.)

a.	What is the accounting rate of return? (Round your answer to 2 decimal places.)

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b.	What is the payback period? (Round your answer to one decimal place.)

	}uetr":ontidaliValeabtTarst,"uetr":ederswAnis,"""":ontiipcres_dab"t},:{2"_6,"0]:[7"_6,"llnu":51"_l,ul:n6"_2,"{}":32"_e,lsfa":42"_1,:-0"_5,"-1":24"_1,:-1"_3,":05""_0,":_4,"seal:f8"_4,"{}":37"_],8}23":77"_1,:64"_3{":[3"_2,"uetr":45"_",e1tlTiw%20Ne:"e"am"n],e}ru:t7"_4,":14"_5,"[]":33"_},5""4":c2,"1""5":c1,"0"10:"0""c:{9"_1,""}23:"0"{"":59"_],}]}}N"IOSTUE"Q":76"_:{5"_5,"}}:23"_5,"uetr":63"_:{5"_5,"C"RIMENU:"3"_7{"":29"_},"}:"9"_7,"s"arYe:"5"_7{"":_0,""}:"9"_7,"s"arYe:"5"_7{"":30"_:{2""_:{0"_2{"},"}seonsprer%20beumeNylst:"7""_},t"ghri:"8"_6,"uetr":43"_",ONTILUSO:"6"_7{"":55"_},2}":53"_1,":21"_e,ru:t3"_6{"":55"_",ICERUM"N":73"_:{9"_2,"}}""":79"_",)~12A("~":75"_:{6"_5,""}:"9"_7,"""":75"_:{0"_3{"":_2{"":20"_,{}}%3B"1)21,%2063%2017,13b(rg:%20orol-cndougrckba:"8""_},)"11%2023,16,%2037(1gb"r":_9,"N"IOSTUE"Q":76"_:{5"_5,"}}""":79"_",odriPek%20acybPa:"5"_7{"":30"_:{2""_:{0"_2{"[[":13"_e,lsfa":41"_},n"owpDro"d":27"_1,:-5"_2,"{}":75"_e,lsfa":82"_:{8"_2,"""":22"_e,lsfa":35"_e,ru:t6"_3,"{}":55"_",leab%20TedtltiUn:"9"_6,":37"_1,":18"_5{":[5"_6{"

c.	What is the net present value? (Round "PV Factor" to 4 decimal places. Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

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d.	What would the net present value be with a 13% hurdle rate? (Round "PV Factor" to 4 decimal places. Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

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e.	Based on the NPV calculations, in what range would the equipments internal rate of return fall? (Round your answer to 2 decimal places.)

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