Homework: Chapter 21 Homework Save 4 of 4 (2 complete) HW Score: 45.83%, 1.83 of 4 pts Score: 0 of 1 pt P21-34 (book/static) Question Help Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018, Dublin Chips expects to deliver 615 prototype chips at an average price of $95,000. Dublin Chips' marketing vice president forecasts growth of 65 prototype chips per year through 2024. That is, demand will be 615 in 2018, 680 in 2019, 745 in 2020, and so on. (Click the icon to view additional information) (Click the icon to view the data on the two options available and additional information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Read the requirements Future Value of Annuity of $1 table Requirement 1. Calculate the cash inflows and outflows of the modernize and replace alternatives over the 2018 - 2024 period First, determine the cash inflows and outflows of the modernize alternative over the 2018 to 2024 period. (Use a minus sign or parentheses for a cash outflows. If a box is not used in the table, leave that box empty, do not enter a zero.) Net cash Initial Proceeds from Units sold contributions investments sale of equipment Year Jan 1, 2018 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Requirements 1. Calculate the cash inflows and outflows of the modernize and replace alternatives over the 2018 - 2024 period. 2. Calculate payback period for the modernize and replace alternatives. 3. Calculate net present value of the modernize and replace alternatives. 4. What factors should Dublin Chips consider in choosing between the alternatives? Print Done 0 Reference - xo - working Present Value of $1 Periods 2% 4% 6% Period 1 0.980 0.962 0.943 Period 2 0.961 0.925 0.890 Period 3 0.942 0.889 0.840 Period 4 0.924 0.855 0.792 Period 5 0.906 0.822 0.747 Period 6 OB 0.790 0.705 Period 7 0.871 0.750 0.665 Periods 0.853 0.7310 .627 Period 90 .837 0.7030 .592 Period 10 0.820 0.676 0.558 Period 11 0.804 0.650 0.527 Period 12 0.788 0.625 0.497 Period 13 0.773 0.601 0.469 Period 14 0.758 0.5770 .442 Period 15 0.743 0.5550.417 Period 16 0.728 05140194 Period 17 0.714 05130371 Period 18 0.700 0.494 0 350 Period 19 066 0.475 0.331 Period 20 0.673 0.456 0.312 Period 21 0.660 0 439 0.294 Period 22 0.647 0.422 0.278 Period 23 0.634 0.406 0.262 Period 24 0.622 0.390 0.247 Period 25 0.610 0.375 0 233 Period 26 0.598 01610220 Period 27 0.586 0.347 0.207 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0215 0.199 0.184 0.170 0.158 0.146 0.135 0.125 10% 12% 14% 0.909 0.893 0.877 0.826 0.797 0.769 0.751 0.712 0.675 0 683 0 636 0.592 0.621 0.567 0.519 0.564 0.507 0.456 0.513 0.452 0.400 0.467 0.404 0.351 0.424 0.361 0.03 0.386 0322 0.270 0.350 0.287 0237 0.319 0.257 0.208 0.290 0.229 0.182 0.283 0.205 0.10 0.239 0.1830 140 0218 0.163 0.123 0.198 0.146 0108 0.10 0.1300 095 0.164 0.116 0083 0.149 0.104 0.073 0.135 0.093 0.064 0.123 0083 0.056 0.112 0.074 0.049 0.1020 066 0.043 0.092 0.059 0.038 0.034 0.053 0.033 0.076 0.047 0.029 16% 18% 20% 22% 24% 26% 20% 0362 0.47 0.833 0 20 0 806 0.794 0.781 0.743 0.7180.694 0.672 0 650 0530 0.610 0.641 0.500 0.579 0551 0524 0.500 0.477 0.552 05160482 0.451 0423 0.397 0373 0.473 04370.402 0.370 0.341 0.315 0.291 0.410 03700 335 0.303 0275 0.250 0.227 0.54 03140279 0.2490222 0.18 0.178 0.305 0.2060 233 0.204 0.179 0.157 0.139 0.23 0.2250.194 0.167 0.144 0.125 0.100 0.227 0.101 0.162 0.137 0.116 0.099 0.035 0.1950 1620,135 0.112 0.0910079 0.006 0108 0.1370.112 0.092 00760.002 0.052 0.145 0.116 0.093 0.075 0 051 0.050 0.040 0.125 0.0990.078 0,062 0.049 0.039 0.032 0.108 0.0840065 0.051 0.0400031 0.025 0003 00710054 0.042 00320025 0.019 000 00000045 0.034 0.025 0.020 0,015 0.000 0.051 0.038 0.028 0.021 0.0160 .012 0.000 0.0430 031 0.023 0.017 0.012 0.000 0.051 0.037 0.026 0.019 0.014 0010 0.007 0.044 0031 0.022 0,015 0,011 0.008 0.006 0.038 0.026 0.018 0.013 0,009 0.006 0.004 0.033 0.022 0.015 0.010 0.007 0.005 0.003 0.028 0.019 0.013 0.008 0.006 0.004 0.003 0.024 0.016 0.010 0.007 0.005 0.003 0.002 0.021 0.014 0.0090.006 0.0040 .002 0.002 0.018 0.011 0.007 0.005 0.003 0.002 0.001 30% 326 404 Periods 0.750 0.758 0.714 Period 1 0.52 0.574 0.510 Period 2 0.455 0.435 0.364 Period 3 350 0.329 0200 Period 4 0259 0.250 0.13 Period 5 0207 .19 0.133 Period 6 0.15 0.143 0005 Period 7 0.123 0.108 0.058 Period 0004 00 0 048 Period 0.073 0.062 0.005 Period 10 0.056 0.047 0.025 Period 11 0043 0.036 0.018 Period 12 0 033 0027 0.013 Period 13 0.025 0.021 0.000 Period 14 0.0200010 0005 Period 15 0.0150012 0.005 Period 16 0012 0009 0.003 Period 17 0.000 0.00 0.002 Period 18 0.007 0.005 0002 Period 19 0.005 0.004 0.001 Period 20 0004 0.003 0.001 Period 21 0.003 0.002 0.001 Period 22 0.002 0.002 0.000 Period 23 0.002 0.001 0.000 Period 24 0.001 0.001 0.000 Period 25 0.001 0.001 0.000 Period 26 0.001 0.001 0.000 Period 27 - Print Done Question a Reference Nina's coated change von and its est termin Presen Read Requid Present Value of Annuity of $1.00 in Aurears Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 20% Period 1 0.000 0.362 0.943 0.926 000 0.893 0.877 0.862 047 0833 08200806 0.74 Period 2 1.942 1.556 1.833 1.783 1.736 1.000 1.047 1.505 1 566 1528 1492 1457 1.424 Period 3 2.884 2.775 2673 2577 2.487 2.402 2.3222.246 2.174 2.106 2042 1901 1.923 Period 4 3.000 3.000 3.405 3.312 3.170 3.037 2.914 2.798 2690 2.589 2494 2.404 2320 Period 5 4.713 4.452 4.212 3.903 3.791 3.605 3.433 3.274 3.127 2.9912.864 2.745 2535 Period 6 5.601 5.242 4.917 4.623 4.355 4.111 3 BO 3.685 3.44 3 1 3 1073020 21 Period 76.4726.00255825.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 32423.083 Period 7325 5.733 6.210 5.747 5.335 4.60 4.6394.344 4.078 3.837 3.6193421 3.241 Period 9 8.162 7.435 6.802 6 247 5.759 5328 4.040 4.007 4,303 40313.756 3.566 3366 Period 10 8.9838 .111 7.360 6.710 6.145 5.6505.216 4,833 4.494 4.1923.923 3682 3465 Period 11 9.787 8.7607 887 7.139 6.495 598 5.4535.020 4.656 4327 4.0353.776 3543 Period 12 10 575 93858718475366814 6.194 5.000 5.197 4.793 4.4394.127 3.851 3.606 Period 13 11 948 9.986 8.653 7904 7103 6.424 5,842 5.342 4.910 4.5334203 3.912 3.656 Period 14 12.106 10.563 0.2058244 7367 6.628 6.002 5.468 5.008 46114.265 3.962 3.605 Period 15 12 849 11.118 9.712 8550 7.606 6.811 6.142 5.575 30024.675 43154001 3.725 Period 16 13 578 11652 10.106 8.8517824 6.074 265 5.668 5.162 4.73043574.033 3.751 Period 17 14.292 12.106 10.477 9.122 802271206.373 5.749 5.222 4.775 4.301 4.050 3771 Period 18 14.992 12659 10.8 9.372 8.2017 250 6.467 5.818 5.2734.812 441940803.786 Period 19 15 678 13.114 11.158 06048.365 7306 6.550 5.677 5.316 4.443 44424097 3.790 Period 20 16 351 13500 114709818 8.514 7.469 6.623 5.92 5.353 4.870 4.460 4.110 3.808 Period 21 17 011 14029 11.754 10.017 8.649 7.562 6.687 5.973 5.384 4.891 4.476 4.121 3816 Period 22 17 658 14.45112042 10. 201 8.772 7645 6.7436 011 5.410 4.909 4.488 4.1303.822 Period 23 18 292 14.857 12 303 10.371 88837.718 6.792 6,044 5.432 4.925 4.499 4.1373827 Period 24 18 914 15 247 12 550 10.5298.985 7.7846.835 6.073 5.451 4.937 4.507 4.1433831 Period 25 19.523 15 622 12.783 10.675 9.0777 8436.873 6.097 5.467 4.948 4.5144.147 3834 Period 26 20 121 15.983 13.003 10.810 9.161 7896 6.906 6.118 5.480 4.956 4.520 4.151 3.837 Period 27 20.707 16 330 13211 10.935 9.237 7943 6.935 6.136 5.492 4.964 4.524 4.154 3.839 20% 30% 30% 40 Periods 0.781 0.789 078 0714 Period 1 1.392 1351 1331 1224 Period 2 1.868 1.315 1706 15 Period 3 2241 2105 2006 1849 Period 4 2.532 2436 2345 2.005 Period 5 22 264 254 2-16 Period 2337 2.802 2577 2263 Period 7 3.016 2925 2.75 2331 Period 3184 3.019 2868 2379 Period 9 3.250 3.092 2930 2.414 Period 10 3335 3.147 2.578 2438 Period 11 3.387 3.190 3013 2.456 Period 12 3427 322330402459 Period 13 3.459 3249 3.061 2.478 Period 14 343 328 3076 2.484 Period 15 3.503 32833088 2.480 Period 16 3518 3.2953.097 2492 Period 17 3529 33013.104 2494 Period 18 3530 3311 100 2406 Period 19 3546 3316 3113 2497 Period 20 3.551 33203116 2408 Period 21 3.556 33333.18 2.498 Period 22 3.550 3.325 3120 2 499 Period 23 3.562 3.3273.121 2.499 Period 24 3.564 3.329 3.122 2.499 Period 25 3.566 3.330 3.123 2.500 Period 26 3567 3.331 3.123 2.500 Period 27 - Print Done Check An u yuul, In 2018, Dublin Chips expects to deliver 615 prototype chips at an average price of 595,000. Dublin Chips marketing viced -ar through 2024. That is, demand will be 615 in 2018, 680 in 2019, 745 in 2020, and so on. al information.) on the two options available and additional information.) Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table inflows and outflows of the modernize and replace alternatives over the 2018 - 2024 period. outflows of the modernize alternative over the 2018 to 2024 period. (Use a minus sign or parentheses for a cash outflows. If a box is not used in the table, leave that box empty i Data Table Net cash - X contributions Initial investment in 2018 Terminal disposal value in 2024 Useful life Total annual cash operating cost per prototype chip Modernize 35,300,000 $ 7,500,000 $ 7 years 78,500 $ Replace 66,300,000 16,000,000 7 years 66,000 $ Dublin Chips uses straight-line depreciation, assuming zero terminal disposal value. For simplicity, we assume no change in prices or costs in future years. The investment will be made at the beginning of 2018. and all transactions thereafter occur on the last day of the year. Dublin Chips' required rate of return is 14%. There is no difference between the modernize and replace alternatives in terms of required working capital, Dublin Chips has a special waiver on income taxes until 2024. and then click Check Print Done Clear All Check And * ose 9