^^^ LAYOUT OF QUESTION DONT FOLLOW THESE NUMBERS ^^^

Present Value of $1 Factor Table

Present Value Annuity of $1 Factor Table

Future Value of $1 Factor Table

Future Value of Annuity $1 Factor Table

Sesnie Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $900,000. Projected net cash inflows are as follows: E: (Click the icon to view the projected net cash inflows.) (Click the icon to view the present value annuity table.) 5 (Click the icon to view the present value table.) 5 (Click the icon to view the future value table.) Read the requirements. 3 1 (Click the icon to view the future value annuity table.) Requirement 1. Compute this project's NPV using Sesnie Industries' 14% hurdle rate. Should Sesnie Industries invest in the equipment? Why or why not? Begin by computing the project's NPV (net present value). (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Net present value $ (9,113) Sesnie Industries should not invest in the equipment because its NPV is negative Requirement 2. Sesnie Industries 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. In addition, the refurbished equipment would have a $55,000 residual value at the end of Year 7. Should Sesnie Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the additional NPV provided from the refurbishment. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present Click to select your answer(s) and then click Check Answer. Sesnie Industries should not invest in the equipment because its NPV is negative. Requirement 2. Sesnie Industries 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. In addition, the refurbished equipment would have a $55,000 residual value at the end of Year 7. Should Sesnie Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the additional NPV provided from the refurbishment. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Additional NPV provided from refurbishment $ 6,688 The refurbishment provides a NPV. The refurbishment NPV is to overcome the original NPV of the equipment. Therefore, the refurbishment alter Sesnie Industries' original decision regarding the equipment investment. Click to select your answer(s) and then click Check Answer. Sweeney Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $910,000. Proiected net cash inflows are as follows: 33 (Click the icon to view the projected net cash inflows.) 3 (Click the icon to view the present value table.) 3 (Click the icon to view the present value annuity table.) ! (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Read the requirements. Requirement 1. Compute this project's NPV using Sweeney Industries' 14% hurdle rate. Should Sweeney Industries invest in the equipment? Why or why not? Begin by computing the project's NPV (net present value). (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Requirements Net present value $ 1. Compute this project's NPV using Sweeney Industries' 14% hurdle rate. Should the company invest in the equipment? Why or why not? 2. Sweeney Industries could refurbish the equipment at the end of six years for $105,000. The refurbished equipment could be used one more year, providing $74,000 of net cash inflows in Year 7. In addition, the refurbished equipment would have a $55,000 residual value at the end of Year 7. Should Sweeney Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Enter any number in the edit fields a Data Table Year 1.... 1 v a l . . . . . . . . . . . . . . Year 2 ......... Year 3.................. $264,000 $253,000 $228,000 $211,000 $202,000 $178,000 Year 4.................. Year 5.... Teal . . . . . . . . . . . . . . . . . . Year 6.... I a . . . . . . . . . . . . . . . . . . Print Done 0.636 Periods) 1% | 2% | 3% | 4% | 5% | 6% 8% | 10% | 12% | 14% | 16% | 18% | 20% 0.990 10.980 10.971 10.962 10.952 10.943 0.926 10.909 0.893 10.877 10.862 | 0.847 10.833 10.980 | 0.961 10.943 | 0.925 10.907 10.890 | 0.857 10.826 10.797 10.769 | 0.743 0.718 10.694 0.971 0.942 0.915 10.889 10.864 10.840 | 0.794 0.751 0.712 0.675 | 0.641 0.609 0.579 0.961 | 0.924 0.888 | 0.855 | 0.823 | 0.792 0.735 0.683 0.592 0.552 0.516 0.482 0.951 | 0.906 0.863 0.822 0.784 0.747 10.6811 10.621 0.567 0.519 0.476 0.437 0.402 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 10.456 | 0.410 0.370 0.335 0.933 | 0.871 0.813 0.760 | 0.71 0.665 0.583 0.513 0.452 10.400 0.354 0.314 0.279 0.923 | 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 10.266 0.233 0.914 | 0.837 0.766 10.703 | 0.645 | 0.592 0.500 0.424 0.361 10.308 10.263 10.225 0.194 10.905 | 0.820 0.744 0.676 | 0.614 | 0.558 0.463 || 0.386 | 0.322 10.270 10.227 10.191 0.162 10.896 | 0.804 0.722 | 0.650 | 0.585 | 0.527 0.429 | 0.350 | 0.287 | 0.237 | 0.195 | 0.162 0.135 10.887 | 0.788 0.701 | 0.625 | 0.557 | 0.497 10.397 | 0.319 | 0.257 | 0.208 | 0.168 | 0.137 | 0.112 10.879 | 0.773 0.681 10.601 | 0.530 | 0.469 0.368 | 0.290 | 0.229 | 0.182 | 0.145 | 0.116 | 0.093 10.870 | 0.758 0.661 10.577 | 0.505 | 0.442 0.340 | 0.263 | 0.205 10.160 10.125 | 0.099 10.078 10.861 | 0.743 0.642 0.555 10.481 0.417 0.315 10.239 | 0.183 | 0.140 | 0.108 | 0.084 | 0.065 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.780 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.742 | 0.552 | 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 10.672 | 0.453 | 0.307 | 0.208 | 0.142 | 0.097 | 0.046 | 0.022 | 0.01 | 0.005 | 0.003 | 0.001 | 0.001 34567890 84b8%89 | 1.528 | Periods) 1% | 2% | 3% | 4% | 5% | 6% | 8% | 10% | 12% | 14% | 16% | 18% | 20%, 10.990 | 0.980 | 0.971 10.962 | 0.952 | 0.943 | 0.926 0.909 10.893 10.877 10.862 10.847 10.833 1.970 1.942 1.913 | 1.886 1.859 1.833 1.783 1.736 1.690 1.6471 1.605 1.566 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 12.322 2.246 2.174 2.106 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 4.853 4.713 4.580 14.452 4.329 4.212 3.993 13.791 3.605 13.433 3.274 13.127 12.991 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.11 3.889 3.685 3.498 3.326 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 14.288 4.039 3.812 3.605 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 9.471 8.983 8.530 8.111 7.722 17.360 6.710 16.145 5.650 5.216 4.833 4.494 4.192 678 10.368 19.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.197 4.793 12.134 | 11.348 | 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 13.004 12.106 | 11.296 | 10.563| 9.899 9.295 8.244 7.367 6.628 6.002 5.468 5.008 13.865 12.849 | 11.938| 11.118| 10.380 | 9.712 8.559 17.606 6.811 6.142 5.575 5.092 18.046 | 16.351| 14.877 | 13.590 | 12.462 | 11.470 | 9.818 8.514 7.469 6.623 5.929 5.353 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 7.003 6.177 5.517 32.835 | 27.355 | 23.15| 19.793| 17.159 | 15.046| 11.925 | 9.779 | 8.244 | 7.105 || 6.233 15.548 4.327 4.439 4.533 14.611 4.675 4.870 4.948 4.979 4.997 Periods | | | | | | 1% 1.010 1.020 1.030 1.041 1.051 2% 11.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 15% 1.050 1.103 1.158 1.216 1.276 | 6% 1.060 1.124 1.191 1.262 1.338 18% 1.080 1.166 1.261 1.361 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14%, 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 34567890 TBB46%88% 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 1.243 1.268 1.116 1.127 1.138 1.149 1.161 1.294 1.319 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 2.191 2.666 3.243 4.801 1.710 1.796 1.886 1.980 2.079 1.898 2012 2.133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 12.853 3.138 3.452 13.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 19.266 6.176 7.288 8.599 10.147 11.974 1.346 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.653 3.386 4.322 7.040 3.207 4.292 5.743 10.286 4.661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.960 93.051 13.743 26.462 50.950 188.884 19.461 40.874 85.850 378.721 27.393 62.669 143.371 750.378 38.338 195.396 237.376 1,469.772 Periods 5% | 1% 1.000 2.010 3.030 4.060 5.101 14% 1.000 2.140 12% 1.000 2020 3.060 4.122 5.204 13% 1.000 2.030 3.091 4.184 5.309 14% 1.000 2.040 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 1.000 2.050 3.153 4.310 5.526 16% 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11.491 13.181 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 3.440 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7. 154 6.152 7.214 8.286 9.369 10.462 6.468 7.662 8.892 10.159 11.464 7.336 8.923 10.637 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 12.488 345 67899 HQ84B%89% 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 14.487 4.921 6.610 8.536 10.730 13.233 16.085 19.337 23.045 27.271 32.089 37.581 43.842 6.802 8.142 19.549 11.027 12.578 14.207 15.917 17.713 19.599 21.579 20% 1.000 2.200 3.640 5.368 7.442 19.930 12.916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 8.977 11.414 14.240 17.519 21.321 25.733 30.850 36.786 43.672 51.660 19.442 12.142 15.327 19.086 23.521 28.755 34.931 42.219 50.818 60.965 11.567 12.683 13.809 14.947 16.097 12.808 14.192 15.618 17.086 18.599 13.486 15.026 16.627 18.292 20.024 14.972 16.870 18.882 21.015 23.276 16.645 18.977 21.495 24.215 27.152 18.531 21.384 24.523 27.975 31.772 20.655 24.133 28.029 32.393 37.280 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 26.870 36.459 47.575 75.401 29.778 41.646 56.085 95.026 33.066 47.727 66.439 120.800 36.786 54.865 179.058 154.762 45.762 73.106 113.283 259.057 57.275 72.052 91.025 115.380 146.628 186.688 98.347 133.334 181.871 1249.214 342.603 1471.981 164.494 241.333 1356.787 1530.312 | 790.948 1,181.882 1442.593 | 767.091 | 1,342.025 | 2,360.757 14,163.213 17,343.858