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Fanning Electronics is considering investing in manufacturing equipment expected to cost $250,000. The equipment has an estimate useful life of four years and a salvage value of $ 19,000. It is expected to produce incremental cash revenues of $125,000 per year. Fanning has an effective income tax rate of 40 percent and a desired rate of return of 12 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Determine the net present value and the present value index of the investment, assuming that Fanning uses straight-line depreciation for financial and income tax reporting b. Determine the net present value and the present value index of the investment, assuming that Fanning uses double-declining- balance depreciation for financial and income tax reporting d. Determine the payback period and unadjusted rate of return (use average investment). assuming that Fanning uses straight-line depreciation e. Determine the payback period and unadjusted rate of return (use average investment), assuming that Fanning uses double- declining-balance depreciation (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) TABLE 1 PRESENT VALUE OF $1 n 4% 1 0.961538 2 0.924556 3 0.888996 4 0.854804 5 0.821927 6 0.790315 7 0.759918 8 0.730690 9 0.702587 10 0.675564 11 0.649581 12 0.624597 13 0.600574 14 0.577475 15 0.555265 16 0.533908 17 0.513373 18 0.493628 19 0.474642 20 0.456387 5% 6% 7% 8% 9% 0.952381 0.943396 0.934579 0.925926 0.917431 0.907029 0.889996 0.873439 0.857339 0.841680 0.863838 0.839619 0.816298 0.793832 0.772183 0.822702 0.792094 0.762895 0.735030 0.708425 0.783526 0.747258 0.712986 0.680583 0.649931 0.746215 0.704961 0.666342 0.630170 0.596267 0.710681 0.665057 0.622750 0.583490 0.547034 0.676839 0.627412 0.582009 0.540269 0.501866 0.644609 0.591898 0.543934 0.500249 0.460428 0.613913 0.558395 0.508349 0.463193 0.422411 0.584679 0.526788 0.475093 0.428883 0.387533 0.556837 0.496969 0.444012 0.397114 0.355535 0.530321 0.468839 0.414964 0.367698 0.326179 0.505068 0.442301 0.387817 0.340461 0.299246 0.481017 0.417265 0.362446 0.315242 0.274538 0.458112 0.393646 0.338735 0.291890 0.251870 0.436297 0.371364 0.316574 0.270269 0.231073 0.415521 0.350344 0.295864 0.250249 0.211994 0.395734 0.330513 0.276508 0.231712 0.194490 0.376889 0.311805 0.258419 0.214548 0.178431 10% 12% 14% 16% 20% 0.909091 0.892857 0.877193 0.862069 0.833333 0.826446 0.797194 0.769468 0.743163 0.694444 0.751315 0.711780 0.674972 0.640658 0.578704 0.683013 0.635518 0.592080 0.552291 0.482253 0.620921 0.567427 0.519369 0.476113 0.401878 0.564474 0.506631 0.455587 0.410442 0.334898 0.513158 0.452349 0.399637 0.353830 0.279082 0.466507 0.403883 0.350559 0.305025 0.232568 0.424098 0.360610 0.307508 0.262953 0.193807 0.385543 0.321973 0.269744 0.226684 0.161506 0.350494 0.287476 0.236617 0.195417 0.134588 0.318631 0.256675 0.207559 0.168463 0.112157 0.289664 0.229174 0.182069 0.145227 0.093464 0.263331 0.204620 0.159710 0.125195 0.077887 0.239392 0.182696 0.140096 0.107927 0.064905 0.217629 0.163122 0.122892 0.093041 0.054088 0.197845 0.145644 0.107800 0.080207 0.045073 0.179859 0.130040 0.094561 0.069144 0.037561 0.163508 0.116107 0.082948 0.059607 0.031301 0.148644 0.103667 0.072762 0.051385 0.026084 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 n 4% 5% 6% 7% 8% 996 10% 12% 14% 16% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 1.886095 1.859410 1.833393 1.808018 1.783265 1.759111 1.735537 1.690051 1.646661 1.605232 1.527778 3 2.775091 2.723248 2.673012 2.624316 2.577097 2.531295 2.486852 2.401831 2.321632 2.245890 2.106481 4 3.629895 3.545951 3.465106 3.387211 3.312127 3.239720 3.169865 3.037349 2.913712 2.798181 2.588735 5 4.451822 4.329477 4.212364 4.100197 3.992710 3.889651 3.790787 3.604776 3.433081 3.274294 2.990612 6 5.242137 5.075692 4.917324 4.766540 4.622880 4.485919 4.355261 4.111407 3.888668 3.684736 3.325510 7 6.002055 5.786373 5.582381 5.389289 5.206370 5.0 953 4.868419 4.563757 4.288305 4.038565 3.604592 8 6.732745 6.463213 6.209794 5.971299 5.746639 5.534819 5.334926 4.967640 4.638864 4.343591 3.837160 9 7.435332 7.107822 6.801692 6.515232 6.246888 5.995247 5.759024 5.328250 4.946372 4.606544 4.030967 10 8.110896 7.721735 7.360087 7.023582 6.710081 6.417658 6.144567 5.650223 5.216116 4.833227 4.192472 11 8.760477 8.306414 7.886875 7.498674 7138964 6.805191 6.495061 5.937699 5.452733 5.028644 4.327060 12 9.385074 8.863252 8.383844 7.942686 7.536078 7160725 6.813692 6.194374 5.660292 5.197107 4.439217 13 9.985648 9.393573 8.852683 8.357651 7.903776 7.486904 7.103356 6.423548 5.842362 5.342334 4.532681 14 10.563123 9.898641 9.294984 8.745468 8.244237 7.786150 7.366687 6.628168 6.002072 5.467529 4.610567 15 11.118387 10.379658 9.712249 9.107914 8.5594798.060688 7.606080 6.810864 6.142168 5.575456 4.675473 16 11.652296 10.837770 10.105895 9.446649 8.851369 8.312558 7.823709 6.973986 6.265060 5.668497 4.729561 17 12.165669 11.274066 10.477260 9.763223 9.121638 8.543631 8.021553 7.119630 6.372859 5.748704 4.774634 18 12.659297 11.689587 10.827603 10.059087 9.371887 8.755625 8 201412 7.249670 6.467420 5.817848 4.812195 19 13.133939 12.085321 11.158116 10.335595 9.608599 8.905115 8.364920 7.365777 6.550369 5.877455 4.843496 20 13.590326 12.462210 11.469921 10.594014 9.818147 9.128546 8.513564 7.469444 6.623131 5.928841 4.869580 Reg A and B Req D and E Determine the net present value and the present value index of the investment, assuming that Harper uses straight-line depreciation and double-declining-balance for financial and income tax reporting. (Round your answers for "Net present value" to the nearest whole dollar amount and your answers for "Present value index" to 2 decimal places.) Net present value Present value index a. b Req A and B Reg D and E Determine the payback period and unadjusted rate of return (use average investment), assuming that Harper uses straight- line depreciation and double-declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) (Round your answers to 2 decimal places.) Show less Payback period Unadjusted rate of return d. years % years %