Nee Present Value Use Exhibit 128.1 and Exhibit 123.2 to locate the present value of an annuity at $1, which is the amount to be multiplied times the future annual cash flow amount. Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be 5480,000 per year. The system costs $3,050,000 and will last 10 years, 6. Ever Cardenas is interested in Investing in a women's saecialty shop. The cost of the investment is $230,000. She estimates that the return from owning her awn shop will be $25,000 per year. She estimates that she shop will have a useful life of 6 years. C. Barker Company calculated the NPV of a project and found it to be 563,900. The project's life was estimated to be 8 years. The required rate of return used for the NPV calculation was 10%. The project was expected to produce annual after-tax cash flows of $135,000 Required: 1. Compute the NPV for Campbell Manufacturing, assuming a discount rate of 17%. If required, round all present value calculations to the nearest dollar. Use the minus sign to indicate a negative NPV. Should the company buy the new welding system? No 2. Conceptual Connection: Assuming a mequired rate of return of 3%, calculate the NPV for Evoe Cardenas' Investment. Round to the nearest dollar. It required, round all present value calculations to the nearest dollar. Use the minus sign to indicate a negative NPV. Should she Invest? No What if the estimated retum was $135,000 per year? Calculate the new NPV for Ever Cardenas' Investment. Would this affect the decision? What does this tell you about your analysis Round to the nearest dollar The shop should now be purchased. This reveals that the decision to accent or reject in this case is affected by differences in estimated cash flow 3. What was the required investment for Barker Company's project? Round to the nearest dollar. If required, round all present value calculations to the nearest collar. Feedback che W WARS Net Present Value (V): NPV = P