Joanette, Inc., is considering the purchase of a machine that would cost $660,000 and would last for 9 years, at the end of which, the machine would have a salvage value of $56,000. The machine would reduce labor and other costs by $116,000 per year. Additional working capital of $2,000 would be needed immediately, all of which would be recovered at the end of 9 years. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes.)

Click here to view Exhibit 12B-1 and Exhibit 12B-2 to determine the appropriate discount factor(s) using the tables provided.

Required:

Determine the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.)

EXHIBIT 128-2 Present Value of an Annuity of $1 in Arrears: 11 - Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 1.886 1.859 1.833 1.808 1783 1759 1736 1713 1.690 1668 1647 1626 1605 1585 1.566 1547 1528 1509 1492 1474 1457 1.440 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1.981 1952 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2.448 2.404 2.362 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 31993.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3.518 3.421 3.329 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 10 8.111 7722 7360 7024 6.710 6.418 6.145 5.889 5650 5.426 5.216 5.019 4.833 4.659 4.494 43394192 4.054 3.923 3.799 3682 3571 8.760 8.306 7887 7.499 7139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 4177 4.035 3.902 3.776 3.656 12 9 .385 8.863 8.384 7.943 7.536 71616.814 6.492 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4.439 4.278 4.127 3.985 3.851 3.725 13 9.986 9.394 8.853 8.358 7.904 7.487 7103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3780 14 10.563 9.899 9.295 8.745 8.244 7786 7367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 15 11.118 10.380 9.712 9.108 8.559 8.061 7.606 7.1916.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 4.315 4.153 4.001 3.859 16 11.652 10.838 10.106 9.447 8.851 8.313 7824 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4730 4.536 4.357 4.189 4.033 3.887 17 12.166 11.274 10.477 9763 9.122 8.544 8.022 7549 7120 6.729 6.373 6.047 5749 5.475 5.222 4.990 4775 4.576 4.391 4.219 4.059 3.910 18 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 4.608 4.419 4243 4.080 3.928 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7839 7366 6.938 6.550 6.198 5.877 5584 5.316 5070 4.843 4635 4.442 4.263 4.097 3.942 20 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 7025 6.623 6.259 5.929 5.628 5.353 5101 4.870 4.657 4.460 4.279 4.110 3.954 21 14.029 12.821 11.764 10.836 10.017 9.292 8.649 8.075 7562 7102 6.687 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4.476 4.292 4.121 3.963 22 14.451 13.163 12.042 11.061 10.2019.442 8.7728 .176 7645 7170 6.743 6.359 6.011 5.696 5.410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 23 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8.266 7718 7.230 6.792 6.399 6.044 5723 5.432 5.167 4.925 4.703 4.499 4.311 4.137 3.976 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 7784 7283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 25 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8.422 7.843 7330 6.873 6.464 6.097 5.766 5.467 51954.948 4.721 4.514 4.323 4.147 3.985 26 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8.488 7.896 7.372 6.906 6.491 6.118 5783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 27 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.935 6.514 6.136 5.798 5.492 5.215 4.964 4734 4.524 4.332 4.154 3.990 28 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7984 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 29 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4.1593.994 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 24 EXHIBIT 12B-1 Present Value of $1; 1 | Periods 4% 5% 6% 7% 8% 9% 10% 11% 2% 3% 4% 15% 16% 7% 18% 19% 20% 21% 22% 23% 24% 25% 1 0962 0952 0943 0935 0926 097 0909 0901 0893 0885 087 0870 0862 0855 0847 0840 0833 0826 0820 0813 0806 0800 2 |0925 0907 0890 0873 0857 0842 0826 082 0797 0783 0769 0756 0743 0731 0718 0706 0694 0683 0672 0661 0650 0640 3 0889 0864 0840 0816 0794 02 0751 0731 072 0693 0675 0658 0641 0624 0609 0593 0579 0564 0551 0537 0524 052 4 10855 0823 0792 0763 0735 0708 0683 0659 0636 0613 0592 0572 0552 0534 0516 0499 0482 0467 0451 0437 0423 0410 5 0822 0784 0.747 0713 0681 0650 0621 0593 0567 0543 0519 0497 0476 0456 0437 0419 0402 0.386 0370 0.355 0341 0328 6 10790 0746 0705 0666 0630 0.596 0.564 0535 0.507 0480 0456 0432 0.410 0390 0370 0.352 0335 0.319 0.303 0289 0.275 0.262 7 0760 0.711 0.665 0.623 0.583 0.547 0513 0.482 0452 0425 0400 0.376 0354 0333 0314 0296 0279 0263 0.249 0.235 0.222 0.210 8 0731 0677 0.627 0.582 0540 0.502 0467 0434 0404 0.376 0.351 0327 0.305 0285 0266 0.249 0.233 0.218 0.204 0191 0179 0.168 9 0.703 0645 0.592 0.544 0.500 0460 0424 0391 0361 0.333 0.308 0.284 0263 0243 0225 0.209 0194 0180 0.167 0155 0.144 0.134 10 0676 0.614 0.558 0.508 0.463 0422 0.386 0352 0322 0295 0270 0.247 0227 0208 0.191 0176 0162 0.149 0137 0126 016 0107 | 0650 0.585 0527 0475 0429 0.388 0350 0317 0287 0261 0237 025 0195 0.178 0162 0148 0135 0123 0112 0103 0094 0086 2 0625 0.557 0497 0444 0397 0.356 0319 0286 0257 0231 0208 0187 0.168 0152 0137 0124 0112 0102 0092 0.083 0.076 0069 3 0601 0530 0469 0.45 0368 0326 0290 0.258 0229 0204 0182 0163 0145 030 016 0104 0.093 0084 0.075 0068 0061 0055 4 0.577 0505 0442 0388 0340 0299 0263 0232 0205 0181 0160 0141 0125 011 0099 0088 0078 0069 0062 0055 0049 0044 5 0555 0481 047 0.362 0.315 0275 0239 0209 0183 0160 0.140 0.123 0.108 0.095 0084 0074 0.065 0.057 0.051 0.045 0.040 0035 6 0534 0458 0394 0339 0292 0252 0218 0188 0163 0141 0123 0107 0093 0081 0071 0062 0054 0047 0042 0036 0032 0028 | 1 058 0436 0371 037 0270 0.231 0198 070 0146 0125 0108 0093 0080 0069 0060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 8 0494 0416 0350 0296 0250 022 0180 0153 0130 0 0095 0081 0069 0059 0051 0044 0038 0032 0028 0024 0021 0018 19 0475 0396 0331 027 0232 0194 0164 0138 0116 0.098 0083 0070 0060 0051 0043 0037 0031 0027 0023 0020 007 0014 20 0456 037 0312 0258 0215 0.178 0.149 0.124 0104 0.08 0073 0.061 0051 0043 0037 0.031 0.026 0.022 0019 0.016 0.014 0.012 21 0.439 0359 0.294 0242 0199 0164 0135 0112 0093 007 0064 0053 0044 0037 0031 0026 0.022 0.018 0.015 0.013 0.01 0.009 22 10422 0.342 0.278 0226 0184 0150 0.123 0101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.01 0.009 0.007 23 0406 0326 0.262 0.21 0170 0138 012 0.091 0074 0.060 0049 0040 0033 0027 0022 0.018 0015 0.012 0.010 0.009 0.007 0.006 24 0390 0.310 0.247 0197 0158 0126 0102 0.082 0.066 0.053 0043 0.035 0028 0023 0019 0.05 0013 0.010 0.008 0.007 0.006 0.005 10.375 0.295 0233 0184 0.146 016 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.009 0.007 0.006 0.005 0.004 26 0361 0281 0220 072 035 0106 0084 0066 0053 0042 0033 0026 0021 007 0014 001 0009 0007 0006 0005 0004 0003 27 0347 0268 0207 0161 0125 0098 0076 0060 0047 0037 0029 0023 0018 004 001 0009 0007 0006 0.005 0004 0003 0002 28 0333 0255 0196 0150 016 0090 0069 0.054 0.042 0033 0026 0020 0016 0012 0010 0008 0006 0005 0004 0003 0002 0002 29 0321 0243 0185 0141 0107 0082 0063 0048 0037 0029 0022 007 004 001 0008 0006 0005 0004 0003 0.002 0.002 0.002 30 0308 0231 0174 0131 0099 0075 0057 0044 0033 0026 0020 0015 002 0009 0007 0005 0004 0003 0003 0002 0002 0001 40 0208 0142 0097 0067 0046 0032 0022 005 0.01 0.008 0.005 0.004 0.003 0.002 0001 0001 0.001 0000 0.000 0.000 0.000 0.000