Net Present Value Use Exhibit 12B. 1 and Exhibit 12B.2 to locate the present value of an annuity of1, which is the amount to be multiplied times the future annual cash flow mount. Each of the following scenarios is independent. Assume that all cash flaws 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 s3,450,000 and will last 10 years b. Evee Cardenas is interested in investing in a women's specialty shop. The cost of the investment is $330,000. She estimates that the return from owning her own shop will be $35,000 per year, She estimates that the shop will have a useful life of 6 years, c. Barker Company calculated the NPV 0 a project and found it to be $63,900 The project's life was estimated to be 8 years. The equired rate ofret used for the NPV calculat on as 10%. The project was expected to produce annual after-tax cash flows of S135 000 Required: 1. Compute the NPV for Campbell Manufacturing, assuming a discount rate o 12% if required round all present value calculations to the nearest dollar. Use the min us sign to indicate a negative NPV. 738.0001 x Should the company buy the new welding system? No v 2. onceptual Connection Assuming a required rate o retum o gs ate he N or Evee Car enas investment. Round t the nearest dolalf required roun al present vai e calculati s to the ne est do ar Use the minus s gn o in negat ve MPV ca c cate 168,195 X Should she invest? No What if the estimated return was $135,000 per year? Celculate the new NPV for Evee Cardenas investment. Would this affect the decision? Whet does this tell you about your analysis? Round to the nearest doller 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 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 nesrest dollar 656,325 X