Mellow is considering replacing 20 of their checkout registers with new self-checkout equipment i (Click the icon to view additional information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Given the preceding information, what is the net present value (NPV) of the new equipment? Ignore taxes. (Round intermediary calculations to the nearest whole dollar. Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net value of the investment rounded to the nearest whole dollar.) The net present value is More info Requirements The equipment currently being used is fully depreciated and has no disposal value. The new equipment will cost a total of $215,000. Because the new equipment is self-serve, Mellow will have annual incremental cash savings in labor costs of $64,000 per year. The equipment will have a 5-year useful life and no terminal disposal value. The equipment will be depreciated using the straight-line method. Mellow requires a 6% real rate of return 1. Given the preceding information, what is the net present value (NPV) of the new equipment? Ignore taxes. 2. Assume the $64,000 cost savings are in current real dollars and the inflation rate is 2%. Recalculate the NPV of the project. 3. Based on your answers to requirements 1 and 2, should Mellow buy the new checkout equipment? 4. Now assume that the company's tax rate is 30%. Calculate the NPV of the equipment assuming no inflation. 5. Again assuming that the company faces a 30% tax rate, calculate the NPV of the equipment under an inflation rate of 2% 6. Based on your answers to requirements 4 and 5, should Mellow buy the new checkout equipment? Print Done Print Done