i Requirements 1. Compute this project's NPV using Eon's 14% hurdle rate. Should Eon invest in the equipment? 2. Eon could refurbish the equipment at the end of six years for $102,000. The refurbished equipment could be used one more year, providing $78,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $52,000 residual value at the end of year 7. Should Eon invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done i Data Table Year 1 $ Year 2 Year 3 Year 4 Year 5 260,000 253,000 222,000 210,000 201,000 177,000 Year 6 Print Done A Reference Present Value of $1 Periods 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 18% 20% 0.847 0.833 0.7180.694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 0.592 1% 2% 0.990 0.980 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 0.942 | 0.888 0.933 0.871 0.923 0.853 0.914 0.837 0.905 0.820 0.896 0.804 0.887 0.788 0.879 0.773 0.870 0.758 0.861 0.743 0.853 0.728 0.844 0.714 0.836 0.700 0.828 0.686 0.820 0.673 0.811 0.660 0.803 0.647 0.795 0.634 0.788 0.622 0.780 0.610 0.772 0.598 0.764 0.586 0.757 0.574 0.7490.563 3% 4% 0.971 0.962 0.943 0.925 0.915 0.889 0.888 0.855 0.863 0.822 0.837 0.790 0.813 0.760 0.789 0.731 0.766 0.703 0.744 0.676 0.722 0.650 0.701 0.625 0.681 0.601 0.661 0.577 0.642 0.555 0.623 0.534 0.605 0.513 0.587 0.494 0.570 0.475 0.554 0.456 0.538 | 0.439 0.522 0.422 0.507 | 0.406 0.492 0.390 0.478 0.375 0.464 0.361 0.347 0.437 0.333 0.424 0.321 5% 6% 0.952 0.943 0.907 0.890 0.864 0.840 0.823 0.792 0.784 | 0.747 0.746 0.705 0.711 0.665 0.677 0.627 0.645 0.614 0.558 0.585 0.527 0.557 | 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.458 0.394 0.436 0.371 0.416 0.350 0.396 0.331 0.377 0.312 0.359 0.294 0.342 | 0.278 0.326 0.262 0.310 0.247 0.295 0.233 0.281 0.268 0.207 0.255 0.196 0.243 0.185 8% 9% 0.926 0.917 0.8570.842 0.794 0.772 0.735 0.708 0.681 0.650 0.630 0.596 0.583 0.547 0.540 0.502 0.500 0.460 0.463 0.422 0.429 0.388 0.397 0.356 0.368 0.326 0.340 0.299 0.315 0.275 0.292 0.252 0.270 0.231 0.250 0.212 0.232 | 0.194 0.215 0.178 0.199 0.164 0.184 0.150 0.170 0.138 0.158 0.126 0.146 0.116 0.135 0.106 0.125 | 0.098 0.116 0.090 0.1070.082 | 0.475 | 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 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 0.308 0.386 0.322 0.270 0.350 0.287 0.237 0.319 0.257 0.208 0.290 0.229 0.182 0.263 0.205 0.160 0.239 0.183 0.140 0.218 0.163 0.123 0.198 0.146 0.108 0.180 0.130 0.095 0.164 0.116 0.083 0.149 0.104 0.073 0.135 0.093 0.064 0.123 0.083 0.056 0.112 0.074 | 0.049 0.1020.066 0.043 0.092 0.059 0.038 0.084 0.053 0.033 0.076 0.047 0.029 0.069 0.042 0.026 0.063 0.037 0.022 15% 16% 0.870 0.862 0.756 0.743 0.658 0.641 0.572 0.552 0.497 0.476 0.432 0.410 0.376 0.354 0.327 0.305 0.284 0.263 0.247 0.227 0.215 0.195 0.187 0.168 0.163 0.145 0.141 0.125 0.123 0.108 0.107 0.093 0.093 0.080 0.081 0.069 0.070 0.060 0.061 0.051 0.053 | 0.044 0.046 0.038 0.040 0.033 0.035 0.028 0.030 0.024 0.026 0.021 0.023 0.018 0.020 0.016 0.017 | 0.014 0.135 0.112 0.093 0.078 0.065 | 0.162 0.137 | 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.054 0.045 0.038 0.031 0.026 0.242 | 0.226 0.211 0.197 0.184 0.172 0.161 0.150 0.141 0.031 0.026 0.022 0.019 0.016 0.014 0.011 0.010 0.008 0.022 0.018 0.015 0.013 0.010 0.009 0.007 0.006 0.005 0.281 0.220 0.450 Print Done 0.749 0.742 0.672 0.608 0.005 0.004 0.563 0.552 0.453 0.372 0.424 0.412 0.307 0.228 0.321 0.308 0.208 0.141 0.243 0.231 0.142 0.087 0.185 0.174 0.097 0.054 0.141 0.131 0.067 0.034 0.107 0.099 0.046 0.021 0.082 0.075 0.032 0.013 0.063 0.057 0.022 0.009 0.037 0.033 0.011 0.003 0.022 0.020 0.005 0.001 0.017 0.014 0.015 0.012 0.0040.003 0.001 0.001 0.008 0.007 0.001 0.001 Print Print Done Done i Reference | Periods 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 1.970 1.942 | 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.6901.647 1.626 1.605 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 | 3.352 3.274 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 | 3.784 3.685 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 4.607 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.1616.814 6.194 5.660 5.421 5.197 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 | 7.103 6.424 5.842 5.583 5.342 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 15.562 14.292 13.166 12.166 11.274 10.477 9.763 8.544 8.022 7.120 6.373 6.047 5.749 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 6.128 5.818 17.226 15.678 14.324 13.134 12.085 | 11.158 | 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 18.046 16.351 14.877 13.590 12.462 11.470 10.594 | 9.818 9.129 8.514 7.469 6.623 6.259 5.929 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 8.649 7.562 6.687 6.312 5.973 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 8.772 7.645 6.743 6.359 6.011 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 7.718 6.792 6.399 6.044 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6.835 6.434 6.073 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.8239.077 7.843 6.873 6.464 6.097 22.795 20.121 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.1617.896 6.906 6.4916.118 23.560 20.707 18.327 16.330 14.643 13.211 11.987 10.935 10.027 9.237 7.943 6.935 6.514 6.136 24.316 21.281 18.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 7.984 6.961 6.534 6.152 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.1989.370 8.022 6.983 6.551 6.166 4.656 4.793 4.910 5.008 5.092 9.122 5.162 5.222 5.273 5.316 5.353 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.844 4.870 4.891 4.909 4.925 4.937 4.948 4.956 4.964 4.970 4.975 9.292 5.384 5.410 5.432 5.451 5.467 5.480 5.492 5.502 5.502 5.510 Print Done 24.316 21.281 18.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 7.984 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.198 | 9.370 8.022 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.055 32.835 27.355 23.115 19.793 13.332 11.925 10.757 9.7798.244 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 8.304 25.808 6.961 6.534 6.152 6.983 6.551 6.166 7.003 6.566 6.177 7.105 6.642 6.233 7.133 6.6616.246 5.502 5.510 5.517 5.548 5.554 4.970 4.975 4.979 4.997 4.999 Print Done Eon Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $930,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) 3 (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute this project's NPV using Eon's 14% hurdle rate. Should Eon invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash Inflow PV Factor (i = 14%) Present Value Years Present value of each year's inflow: 1 2 3 4 5 (n = 1) (n = 2) (n = 3) (n = 4) (n = 5) (n = 6) Total PV of cash inflows 0 Initial investment Net present value of the project Enter any number in the edit fields and then click Check