Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project E ($50,000 Investment) Project H ($42,000 Investment) Year Cash Flow Year Cash Flow $14,000 17,000 1 $23,000 17,000 13,000 1 2 2 3 22.000 3 4 29,000 a. Determine the net present value of the projects based on a zero percent discount rate. Project E Project H b. Determine the net present value of the projects based on a discount rate of 13 percent. (Do not round intermediate calculations and round your answers to decimal places.) Project E Project H c. If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 13 percent? Project E Project H Both H and E Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $90,000. The equipment falls into the five- year category for MACRS depreciation and can currently be sold for $40,800. A new piece of equipment will cost $290,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Cash Year Savings 67,000 57,000 1 2 3 55.000 4 53,000 50,000 39,000 6 The firm's tax rate is 40 percent and the cost of capital is 14 percent. a. What is the book value of the old equipment? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Book value b. What is the tax loss on the sale of the old equipment? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Tax loss c. What is the tax benefit from the sale? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Tax benefit d. What is the cash inflow from the sale of the old equipment? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Cash inflow