Net Present Value

Use Exhibit $12$B$.1$ and Exhibit $12$B$.2$ to locate the present value of an annuity of $$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 $$480,000$ per year. The system costs $$2,150,000$ and will last $10$ years.

Required:

$

Should the company buy the new welding system?

$

Should she invest?

N : $$

$

The shop should now $$ be purchased. This reveals that the decision to accept or reject in this case is affected by differences in estimated cash flow $$

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 dollar.

$$