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Taylor Company is considering the purchase of a ne w machine. The machine will cost $247,000 and is expected to last for 9 y ears. However, the machine will need maintenance costing $7,000 at th e end of year four and maintenance costing $30,000 at the end of year eight. In addition, purchasing this machine would require an immediate investment of $50,000 in working capital which would be released for inv estment elsewhere at the end of the 9 years. The machine is expected to have a $10,000 salvage value at the end of 9 years. The machine will be u sed to generate net cash inflows of $50,000 per year in each of the 9 year s. Taylor Company has a cost of capital of 8%. Calculate the net present value (NPV) of this mach Future Value of a Lump-Sum Periods 3% 1.0927 1.1255 1.1593 1.1941 7 1.2299 8 1.2668 9 1.3048 10 1.3439 12 1.4258 151.5580 16 1.6047 17 1.6529 18 1.7024 19 1.7535 20 1.8061 211.8603 22 1.9161 23 1.9736 2.0325 25 2.0938 60 5.8916 Rate of interest per period in percent 4% 6% 8% 9% 10% 12% 14% 16% 1.1249 1.1576 1.1910 1.2597 1.2950 1.3310 1.4049 1.4815 1.5609 1.1699 1.2155 1.2625 1.3605 1.4116 1.4641 1.5735 1.6890 1.8106 1.2167 1.2783 1.3382 1.4693 1.5386 1.6105 1.7623 1.9254 2.1003 1.2653 1.3401 1.4185 1.5869 1.6771 1.7716 1.9738 2.1950 2.4364 1.3159 1.4071 1.5036 1.7138 1.8280 1.9487 2.2107 2.5023 2.8262 1.3686 1.4775 1.5939 1.8510 1.9926 2.1436 2.4760 2.8526 3.2784 1.4233 1.5513 1.6895 1.9990 2.1719 2.3580 2.7731 3.2519 3.8030 1.4802 1.6289 1.7909 2.1589 2.3674 2.59383.1059 3.7072 4.4114 1.6010 1.7959 2.0122 2.5182 2.8127 3.1384 3.8960 4.8179 5.9360 1.8009 2.0789 2.3965 3.1722 3.6425 4.17735.4736 7.1379 9.2655 1.8730 2.1829 2.5404 3.4259 3.9703 4.5950 6.1304 8.1372 10.7480 1.9479 2.2920 2.6928 3.7000 4.3276 5.0545 6.8660 9.2765 12.4677 2.0258 2.4066 2.8543 3.9960 4.7171. 5.5599 7,6900 10.5752 14.4625 2.1069 2.5270 4.3157 5.1417 6.1159 8.6128 12.0557 16.7765 2.1911 2.6533 3.2071 4.6610 5,6044 6.7275 9.6463 13.7435 19,4608 2.2788 2.7860 3.3996 5.0338 6.108 7.4003 10.8039 15.6676 22.5745 2.3699 2.92533.6035 5.4365 6.6586 8.1403 12.1003 17.8610 26,1864 2.4647 3.0713 3.8198 5.87157.25798.9543 13.5524 20.3616 30.3762 2.5633 3.2250 4.0489 6.3412 79111 9.8497 15.1786 23.212235,2364 2.6658 3.3864 4.2919 6.84858.6230 10.8347 17.0000 26.4619 40.8742 10.5196 18.679232.9877 101.257 176,031 304.482897.597 2595.92 7370.20 3.0256 24 Present Value of Lump-Sum Present Value of Lump-Sum 6% Periods 5% 0.9151 0.8638 0.8396 0.8885 0.8227 0.7921 5 0.8626 0.7835 0.7473 6 0.8375 0.7462 0.7050 71 0.8131 0.7107 0.6651 8 0.7894 0.6768 0.6274 9 0.7664 0.6446 0.5919 0.7441 0.6139 0.5584 12 0.7014 0.5568 0.4970 0.4810 0.4173 16 0.6232 0.4581 0.3937 170.6050 0.4363 0.3714 18 0.58740.41550.3503 19 0.5703 0.3957 0.3305 200.5537 0.3769 0.3118 0.5375 0.3589 0.2942 0.4920 0.3101 0.2470 0.4776 0.29530.2330 Rate of interest per period in percent 8% 9% 10% 12% 14% 0.7938 0.7722 0.7513 0.7118 0.6750 0.7350 0.7084 0.6830 0.6355 0.5921 0.6806 0.6499 0.6209 0.5674 0.5194 0.6310 0.5963 0.5645 0.5066 0.4556 0.5835 0.5470 0.5132 0.4523 0.3996 0.5403 0.5019 0.4665 0.4039 0.3506 0.5003 0.4604 0.4241 0.3606 0.3075 0.4632 0.4224 0.3855 0.3220 0.2697 0.3971 0.3555 0.3186 0.2567 -0.2076 0.3152 0.2745 0.2394 0.1827 0.1401 0.2919 0.2519 0.2176 0.1631 0.1229 0.2703 0.2311 0.1978 0.1456 0.1078 0.2503 0.2120 0,1799 0.1300 0.0946 0.23170.1945 0.1635 0.1161 0.0829 0.2146 0,1784 0.1486 0.1037 0.0728 0.1987 0.1637 0.1351 0.0926 0.0638 0.1577 0.1264 0.1015 0.0659 0.0431 0.1460 0.11600.0923 0.0588 0,0378 15% 0.6575 0.5718 0.4972 0.4323 0.3750 0.3269 0.2843 0.2472 0.1870 0.1229 0.1069 0.0929 0.0808 0,0703 0.0611 0.0531 0.0349 0.0304 20% 0.5787 0.4823 0.4019 0.3349 0.2791 0.2326 0.1938 0.1615 0.1122 0.0649 0.0541 0.0471 0.0376 0.0317 0.0261 0.0217 0.0126 0.0105 Future Value of an Annuity Rate of interest per period in percent Periods 3% 4% 5% 6% 8% 9% 10% 12% 14% 16% 3 3.0909 3.1216 3.1525 3.1836 3.2464 3.2781 3.3100 3.3744 3.4396 3.5056 4.1836 4.2465 4.3101 4.3746 4.5061 4.5731 4.6410 4.7793 4.9211 5.0665 5.3091 5.4163 5.5256 5.6371 5.8667 5.9847 6.1051 6.3529 6.6101 6.8771 6 6.4684 6.6330 6.8019 6.9753 7.3359 7.5233 7.7156 8.1152 8.5355 8.9775 77.66257.89838.1420 8.3938 8.9228 9.2004 9.4872 10.0890 10.7305 11.4139 8 8.8923 9.2142 9.5491 9.8975 10.6366 11.0285 11.4359 12.2997 13.2328 14.2401 9 | 10.1591 10.5828 11.0266 11.4913 12.4876 13.0210 13.5795 14.7757 16.0853 17.5185 10 | 11.4639 12.0061 12.5779 13.1808 14.4866 15.1929 15.9374 17.5487 19.3373 21.3215 12 14.1920 15.0258 15.9171 16.8699 18.9771 20.1407 21.3843 24.1331 27.2707 30.8502 15 18.5990 20.0236 21.5786 23.2760 27.1521 29.360931.7725 37.2797 43.8424 51.6595 16 20.1569 21.8245 23.6575 25.6725 30.3243 33.0034. 35.9497 42.7533 50.9804 60.9250 21.7616 23.6975 25.8404 28.2129 33.7502 36.9737 40.5447 48.8837 59.1176 71.6730 1823.4144 25.6454 28.1324 30.9057 37.450241.3013 45.5992 55.7497 68.3941 84.1407 19 25.1169 27.6712 30.5390 33.7560 41.4463 46.0185 51.1591 63.4397 78.9692 98.6032 20 26.8704 29.7781 33,0660 36.7856 45.7620 51.1601 57.2750 72.0524 91.0249 115.380 21 28.676531.9692 35.7193 39.9928 50.4229 56.7645 64.0025 81.6 22 30.5368 34.2480 38.5052 43.3923 55.4568 62.8733 71.4028 92.5026 120.436 157.415 23 32.4529 36.6179 41.430546.9958 60.8933 69.5319 79.5430 104.603 138.297 183.601 2434.4265 39.0826 44.5020 50.8156 66.7648 76.7898 88.4973118.155 158.659 213.978 25 36.4593 41.6459 47.7271 54.8645 73.1059 84.700998.3471 133.333 181.871 249.214 60 163.053 237.991 353.584 533.128 1253.21 1944.79 3034.827471.64 18535.146037.5 17 Present Value of an Annuity Rate of interest per period in percent Periods %% 6% 8% 9% 10% 12% 15% 2.9703 2.8286 2.7233 2.6730 2.5771 2.5313 2.4869 2.4018 2.2832 3.9505 3.7171 3.5460 3.4651 3.3121 3.2397 3.1699 3.0374 2.8550 4.9259 4.5797 4.3295 4.2125 3.9927 3.8897 3.7908 3.6048 3.3522 5.8964 5.41725.0757 4.91734.62294.48594.3553 4.1114 3.7845 6.8621 6.2303 5.7864 5.58245.2064 5.0330 4.8684 4.5638 4.1604 8 7.8230 7.0197 6.4632 6.2098 5.7466 5.5348 5.3349 4.9676 4.4873 9 8.7791 7.7861 7.1078 6.8017 6.2469 5.9953 5.7590 5.3283 4.7716 10 9.7304 8.5302 7.7217 7.3601 6.7101 6.4177 6.1446 5.65025.0188 1211.6189 9.9540 8.8633 8.3838 7.5361 7.1605 6.8137.6.1944 5.4206 15 14.4166 11.9379 10.3797 9.7123 8.5595 8.0607 7.6061 6.8109 5.8474 16 15.3399 12.5611 10.8378 10.1059 8.8514 8.3126 7.8237 6.9740 5.9542 17 16.2586 13.1661 11.2741 10.4773 9.1216 8.5436 8.0215 7.1196 6,0472 18 17.1728 13.7535 11.6896 10.8276 9.3719 8.7556" 8.2014 7.2497 6.1280 19 18.0824 14.3238 12.0853 11.1581 9.6036 8.9501 8.3649 7.3658 6.1982 20 18.9874 14.8775 12.4622 11.4699. 9.81829.1286 8.5135 7.4694 6.2593 19.8880 15.4150 12.8212 11.7641 10.0168 9.2922 8.6487 7.5620 6.3125 25 23.4456 17.4132 14.0939 12.7834 10.6748 9.8226 9.0770 7.8431 6.4641 20% 2.1065 2.5887 2.9906 3.3255 3.6046 3.8372 4.0310 4.1925 4.4392 4.6755 4.7296 4.7746 4.8122 4.8435 4.8696 4.8913 4.9476
