Jeren Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Charlotte, North Carolina. The solar panel project would cost $575,000 and would provide cost savings in its utility bills of $65,000 per year. It is anticipated that the solar panels would have a life of 15 years and would have no residual value. Read the requirements. Requirement 1. Calculate the payback period in years of the solar panel project. Determine the formula, then calculate the payback period. (Round your answer to two decimal places.) Payback period - X 0 Requirements 1. Calculate the payback period in years of the solar panel project. 2. If the company uses a discount rate of 10%, what is the net present value of this project? 3. If the company has a rule that no projects will be undertaken that have a payback period of more than five years, would this investment be accepted? If not, what arguments could the energy manager make to try to obtain approval for the solar panel project? 4. What would you do if you were in charge of approving capital investment proposals? } 12. 0.893 0.797 0.712 0.636 0.567 166 0.862 0.743 0.641 0.552 0.476 Periods 1% 0.990 2 0.980 3 0.971 4 0.961 5 0.951 0.942 0.933 0.923 9 0.914 10 0.905 11 0.896 12 0.887 13 0.879 14 0.870 15 0.861 2% 3% 496 0.980 0.971 0.962 0.961 0.943 0.925 0.942 0.915 0.889 0.924 0.888 0.855 0.906 0.863 0.822 0.888 0.837 0.790 0.671 0.813 0.760 0.853 0.789 0.731 0.837 0.766 0.703 0.820 0.744 0.676 0.804 0.722 0.650 0.788 0.701 0.625 0.773 0.681 0.601 0.758 0.661 0.577 0.743 10.642 | 0.555 0.673 0.554 0.456 0.610 0.478 0.375 0.552 | 0.412 0.306 0.453 0.307 0.208 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 Present Value of $1 5% 6% 86 10% 0.952 0.943 0.926 0.909 0.907 0.890 0.857 0.826 0.864 0.840 0.794 0.751 0.823 0.792 0.735 0.683 0.784 0.747 0.681 0.621 0.746 0.705 0.630 0.564 0.711 0.665 0.583 0.513 0.677 0.627 0.540 0.467 0.645 0.592 0.500 0.424 0.614 0.558 0.463 0.386 0.585 0.527 0.429 0.350 0.557 0.497 0.397 0.319 0.530 0.469 0.368 0.290 0.505 0.442 0.340 0.263 0.481 0.417 0.315 0.239 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 20% 0.833 0.684 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.507 0.452 0.404 0.361 0.322 0.410 0.354 0.305 0.263 0.227 0.287 0.237 0.257 0.208 0.229 0.182 0.205 0.160 0.183 0.140 0.104 0.073 0.059 0.038 0.033 0.020 0.011 0.005 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.037 0.016 0.007 0.001 0.135 0.12 0.093 0.078 0.065 20 25 30 40 0.820 0.780 0.742 0.672 0.377 0.295 0.231 0.142 0.312 0.233 0.174 0.097 0.215 0.146 0.099 0.046 0.149 0.092 0.057 0.022 0.051 0.024 0.012 0.003 0.026 0.010 0.004 0.001 1 2.775 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 3 2.941 2.884 2.829 2.723 2.673 2.577 2.487 2.402 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 6 5.795 5.601 5.417 5.2425.076 4.917 4.623 4.355 4.111 7 6.728 6.472 6.230 6.0025.786 5.582 5.206 4.868 4.564 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 9 8.5668.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 13 12.134 11.348 10.6359.986 9.394 8.853 7.904 7.103 6.424 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 25 22.023 19.52317.413 15.622 14.094 12.783 10.675 9.077 7.843 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 14% 16% 18% 20% 0.877 0.862 0.847 0.833 1.647 1.605 1.566 1.528 2.322 2.246 2.174 2.106 2.914 2.798 2.690 2.589 3.433 3.274 3.127 2.991 3.889 3.685 3.498 3.326 4.288 4.039 3.812 3.605 4.639 4.344 4.078 3.837 4.946 4.607 4.303 4.031 5.216 4.833 4.494 4.192 5.453 5.029 4.656 4.327 5.660 5.197 4.793 4.439 5.8425.342 4.910 4.533 6.002 5.468 5.008 4.611 6.142 5.575 5.092 4.675 6.623 5.929 5.353 4.870 6.873 6.097 5.467 4.948 7.003 6.177 5.517 4.979 7.105 6.233 5.548 4.997 Periods % 2 1 1.010 1.02 LOGO 1.91 1051 2% 1.COM 1.OHO 1.01 1.062 1. 1 1.00 106] 1.93 1. 126 1.159 1,050 1.109 1.156 1% 1. 100 1.210 1331 1.464 1.61] 18 1.160 1.392 1.643 1,999 2. 268 49 1.Del 1.062 1.125 1170 1217 1265 1.316 1.369 1.423 1. 460 4 121 6 1.062 1.12 1.1 1.172 1.195 1219 1.72 11.00 1.94 1105 1.276 1.340 1.407 1.477 1.51 1.629 1.72 1999 2.14 2356 Future Value of $1 1060 OBD 1.124 1.166 1.191 1.260 1202 1.30 1.336 1.49 1.419 1 1.50 1.714 14 1.B51 1.699 1.999 1.791 2.19 1.898 2.332 2.012 2.510 2.133 2.720 2261 12.937 2397 3.172 3207 4.1 4292 6. B-B 5.743 10.063 10 266 21.25 12 1.120 1.25 1.405 1.57 1.762 1.974 2211 2476 3.773 3.106 3.479 3.866 4,363 4.887 5.474 14% 1.140 1,300 1.462 1,639 1.925 2195 2502 2.659 3.252 3.707 4.226 4.318 5.492 6261 7136 1.194 1.230 1.207 1.305 1.344 1.34 1.426 1.469 1.513 1.556 1606 1.160 1946 1.56] 1.87] 2100 2.435 2. B26 3270 3.600 4.471 5.117 5.996 6. 836 7.993 9.266 2006 1 200 1.440 1726 2.074 2.4BB 2996 3.588 - SCO 5.160 6.192 7.430 9.916 10.699 12.339 15.407 10 294 11 12 2.653 3.136 1.116 1.127 1.3 1.149 1.151 1.539 1601 1.665 1.732 1.801 1243 1.268 1204 1.319 1.346 1.48 1.64] 1.311 2.206 1.710 1.796 1.86 1,580 12.079 3.452 2.700 3.15 3.759 4.435 5234 6.17 7286 8.599 10.147 11.974 27.393 2.69 | 143.371 750.37 14 15 3.97 4.177 20 25 30 0 1 220 1.252 1.346 1.469 1.806 2.094 2.427 3 262 2.191 2.66 3.243 4.801 2.653 3.30G 4.322 7. Dec 6.27 10.65 17.449 45.259 9.646 17.CO0 29.960 93.051 13.743 26.462 50.950 1.884 19.461 0.374 65.50 378.721 38.336 5.396 237.376 1469 TT2 Periods 1 1% 1.000 2010 2 2% 1.000 2020 3.060 4.122 5.204 3 3.030 5 3% 1.000 2.030 3.091 4.184 5.309 6.468 7.662 8.892 10.159 11.484 4.060 5.101 6.152 7214 8.286 9.369 10.462 7 8 GO Future Value of Annuity of $1 5% 6% 8% 10% 1.000 1.000 1.000 1.000 2050 2060 2.080 2.100 3.153 3.184 3.246 3.310 4.310 4.375 4.506 4.641 5.526 5.637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11.027 11.491 12.488 13.579 12.578 13.181 14487 15.937 14.207 14.972 16 645 18.531 15.917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21.015 24215 27.975 21.579 23.276 27.152 31.772 33.066 36.788 45.762 57 275 47.727 54.865 73.106 98.347 66.439 79.068 113.283 164494 120.800 154.762 259.057 442.593 4% 1.000 2040 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 18292 20.024 29.778 41.646 56,085 95.026 12% 1.000 2.120 3.374 4.779 6.353 8.115 10.089 12.300 14.776 17.549 20,655 24.133 28.029 32.393 37.280 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 10 14% 16% 18% 20% 1.000 1.000 1.000 1.000 2.140 2. 160 2.180 2.200 3.440 3.506 3.572 3.640 4.921 5.066 5.215 5,388 6.610 6.877 7.154 7442 8.538 8.977 9.442 9.930 10.730 11.414 12.142 12.916 13.233 14240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 23.045 25.733 28.755 32.150 27 271 30.850 34.931 39.581 32.089 36.786 42.219 48.497 37.581 43.672 50.818 59.196 43.842 51.660 60.965 72.035 91.025 115,380 146.628 186,688 181.871 249214 342 603 471.981 356.787 530312 790.948 1,181.882 1,342.025 2,360.7574,163.213 7,343.858 11 12 13 14 15 11.567 12.683 13.809 14.947 16,097 12.808 14.192 15.618 17.086 18.599 20 25 30 40 22.019 28.243 34.786 48.886 26.870 36.459 47.575 75,401 72.052 133 334 241.333 767.091