Marti 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.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. Compute this project's NPV using Mart's 12% hurdle rate. Should Marti invest in the equipment? Use the following table to calculate the not 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 (12%) Present value of each year's inflow: (n = 1) (n=2) (n = 3) PV Factor Present Value Years 1 0 2 3 4 of 5 (n = 5) 6 (n = 6) of Total PV of cash inflows Enter any number in the edit fields and then continue to the next question. Marti 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.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements 4 5 (n = 5) o 6 (n = 6) Total PV of cash inflows 0 Initial investment Net present value of the project Marti Industries invest in the equipment. Requirement 2. Marti could refurbish the equipment at the end of six years for $102,000. The refurbished equipment could be used one more year, providing $73,000 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 Marti 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) Calculate the NPV of the refurbishment (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for cash outflows and for a negative net present value.) Cash PV Factor Present 0 O O . Enter any number in the edit fields and then continue to the next question Marti 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.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 2. Marti could refurbish the equipment at the end of six years for $102,000. The refurbished equipment could be used one more year, providing $73,000 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 Marti 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.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for cash outflows and for a negative not present value.) Cash PV Factor Present (outflow) inflow (1 - 12%) Value Refurbishment at the end of Year 6 (n = 6) Cash inflows in Year 7 (n = 7) Residual value in 7) Net present value of the refurbishment The refurbishment provides a NPV. The refurbishment NPV is to overcome the original NPV of the equipment. Therefore, the refurbishment alter Marti Industries' original decision regarding the equipment investment. Enter any number in the edit fields and then continue to the next question. i - X Data Table nt att bished your ment end outflo Year 1 $ 261,000 facto heses Year 2 253,000 Year 3 223,000 a outfld Year 4 210,000 Year 5 200,000 Year 6 174,000 Print Done e refurbishment NPV is V to overcome the origina riginal decision regarding the equipment investment. Reference Present Value of $1 Periods 1 2% 0.980 0.961 0.942 0.924 0.906 2 3 4 5 6% 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 4% 0.962 0.925 0.889 0,855 0.822 0.790 0.760 0.731 0.703 0.676 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 9% 0.917 0.842 0.772 0.708 0.650 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 18% 0.847 0.718 0.609 0.516 0.437 m s! rb PL 20% 0.833 0.694 0.579 0.482 0.402 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 7 0.8BB 0.871 0.853 0.837 0.820 8 9 10 0.705 0.665 0.627 0.592 0.568 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.811 0.370 0.314 0.266 0.225 0.191 3% 0.971 0.943 0.915 0.888 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0,587 0.570 0.554 0.538 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.359 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.650 0.625 isht 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 11 12 13 14 15 0.804 0.788 0.773 0.758 0.743 0.527 0.497 0.469 0.442 0.417 0.601 0.577 0.555 0.475 0.444 0.415 0.388 0.362 0.195 0.168 0.145 0.125 0.108 info 16 17 18 19 20 mesel 0.728 0.714 0.700 0.686 0.673 0.534 0.513 0.494 0.475 0.456 0.394 0.371 0.350 0.331 0.312 0.294 0.339 0.317 0.296 0.277 0.258 0.242 0.292 0.270 0.250 0.232 0215 0.218 0.198 0.180 0.164 0.149 0.135 0.163 0.146 0.130 0.116 0.104 0.093 0.123 0.108 0.095 0.083 0.073 0.064 0.107 0.093 0.081 0.070 0.061 0.053 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.031 0.093 0.080 0.069 0.060 0.051 0.044 0.054 0.045 0.038 0.031 0.026 0.022 furb ishme 21 0.660 0.439 0.199 0.164 any Print Done te dele Reference TU U.SZZ UZTU 0.247 0.585 11 12 13 14 15 0.339 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 U.900 U.OZU U.14 0.070 VO14 0.896 0.804 0.722 0.650 0.887 0.788 0.701 0.625 0.557 0.879 0.773 0.681 0.601 0.530 0.870 0.758 0.661 0.577 0.505 0.861 0.743 0.642 0.555 0.481 0.853 0.728 0.623 0.534 0.458 0.844 0.714 0.605 0.513 0.436 0.836 0.700 0.587 0.494 0.416 0.828 0.686 0.570 0.475 0.396 0.820 0.673 0.554 0.456 0.377 0.811 0.660 0.538 0.439 0.359 0.803 0.647 0.522 0.422 0.342 0.795 0.634 0.507 0.406 0.326 0.788 0.622 0.492 0.390 0.310 0.780 0.610 0.478 0.375 0.295 0.772 0.598 0.464 0.361 0.281 0.764 0.586 0.450 0.347 0.268 0.757 0.574 0.437 0.333 0.255 0.749 0.563 0.424 0.321 0.243 0.742 0.552 0.412 0.308 0.231 0.672 0.453 0.307 0.208 0.142 0.608 0.372 0.228 0.141 0.087 1.550 U.500 U.403 1.42Z U.300 0.527 0.475 0.429 0.388 0.350 0.497 0.444 0.397 0.356 0.319 0.469 0.415 0.368 0.326 0.290 0.442 0.388 0.340 0.299 0.263 0.417 0.362 0.315 0.275 0.239 0.394 0.292 0252 0.218 0.371 0.317 0.270 0.231 0.198 0.350 0.296 0.250 0.212 0.180 0.331 0.277 0.232 0.194 0.164 0.312 0.258 0.215 0.178 0.149 0.294 0.242 0.199 0.164 0.135 0.278 0.226 0.184 0.150 0.123 0.262 0.211 0.170 0.138 0.112 0.247 0.197 0.158 0.126 0.102 0.233 0.184 0.146 0.116 0.092 0.220 0.172 0.135 0.106 0.084 0.207 0.161 0.125 0.098 0.076 0.196 0.150 0.116 0.090 0.069 0.185 0.141 0.107 0.082 0.063 0.174 0.131 0.099 0.075 0.057 0.097 0.067 0.046 0.032 0.022 0.054 0.034 0.021 0.013 0.009 0.287 0.237 0.215 0.257 0.208 0.187 0.229 0.182 0.163 0.205 0.160 0.141 0.183 0.140 0.123 0.163 0.123 0.107 0.146 0.108 0.093 0.130 0.095 0.081 0.116 0.083 0.070 0.104 0.073 0.061 0.093 0.064 0.053 0.083 0.056 0.046 0.074 0.049 0.040 0.066 0.043 0.035 0.059 0.038 0.030 0.053 0.033 0.026 0.047 0.029 0.023 0.042 0.026 0.020 0.037 0.022 0.017 0.033 0.020 0.015 0.011 0.005 0.004 0.003 0.001 0.001 UZZT U.TYT U.TOZ 0.195 0.162 0.135 0.168 0.137 0.112 0.145 0.116 0.093 0.125 0.099 0.078 0.108 0.084 0.065 0.093 0.071 0.054 0.080 0.060 0.045 0.069 0.051 0.038 0.060 0.043 0.031 0.051 0.037 0.026 0.044 0.031 0.022 0.038 0.026 0.018 0.033 0.022 0.015 0.028 0.019 0.013 0.024 0.016 0.010 0.021 0.014 0.009 0.018 0.011 0.007 0.016 0.010 0.006 0.014 0.008 0.005 0.012 0.007 0.004 0.003 0.001 0.001 0.001 40 50 Print Done Reference Periods 5% 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 6 7 8 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 Present Value of Ordinary Annuity of $1 1% 2% 3% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.13411.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 15.562 14 292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.514 18.857 17.011 15415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 4,031 9 10 4.192 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 sh 11 12 13 14 15 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.312 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 flo al 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.844 4.870 ese 16 17 18 19 20 6.974 7.120 7.250 7.366 7.469 7.562 6.265 6.373 6.467 6.550 6.623 6.687 5.669 5.749 5.818 5.877 5.929 5.973 5.162 5.222 5.273 5.316 5.353 Furt sh 21 5.384 4.891 any Print Done Reference 3.030 3.210 DUTY 4.035 4.494 4.TYZ TU 11 12 13 14 15 5.938 6.194 6.424 6.628 6.811 5,453 5.660 5.842 6.002 6.142 5.234 5,421 5.583 5.724 5.847 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 m 51 b 16 17 18 19 20 B en 4.471 0.803 0.350 7.122 7.300 7.24 0.710 0.410 0.149 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.134 11.348 10.6359.986 9.394 8.853 8.358 7.904 7.487 7.103 13.004 12.106 11.296 | 10.563 9.899 9.295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 15.562 14.292 13.166 12.166 11.274 10.4779.763 9.122 8.544 8.022 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.514 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 9.442 8.772 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 22.795 20.12117.87715.983 14.375 13.003 11.826 10.810 9.929 9.161 23.560 20.707 18.327 16.330 14.643 13.21111.987 10.935 10.027 9.237 24.316 21.28118.764 16.663 14.898 13.406 12.13711.051 10.116 9.307 25.066 21.84419.188 16.984 15.141 13.59112 278 11.158 10.1989.370 25.80B 22.398 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 39.196 31.424 25.730 21.482 18 256 15.762 13.801 12.233 10.962 9.915 21 22 23 24 25 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 6.974 6.265 5.954 7.120 6.373 6.047 7.250 6.467 6.128 7.366 6.550 6.198 7.469 6.623 6.259 7.562 6.687 6.312 7.645 6.743 6.359 7.718 6.792 6.399 7.784 6.835 6.434 7.843 6.873 6.464 7.896 6.906 6.491 7.943 6.935 6.514 7.984 6.961 6.534 8.022 6.983 6.551 8.055 7.003 6.566 8.244 7.105 6.642 8.304 7.133 6.661 sh 5.669 5.749 5.818 5.877 5.929 5.973 6.011 6.044 6.073 6.097 6.118 6.136 6.152 6.166 6.177 6.233 6.246 5.162 5.222 5.273 5.316 5.353 5.384 5.410 5.432 5.451 5.467 5.480 5.492 5.502 5.510 5.517 5.548 5.554 nflo al 26 27 28 29 30 4.956 4.964 4.970 4.975 4.979 4.997 osel furb 40 ishm 50 4.999 any Print Done