Pe P Prid Ped n Presente of Ordinary Annalty of 11 19% 2541 2504 288 275 272 247 2434 2477 25 240 2402 2033 200 204 47 4 A 620 2 TAIN 46 447 434 436 141 517 475 44 002 5724 P14 5347 55 502 4415 4730 Period 17 440 740 425 250 3309 53 3304 P20004 Pe 21 an 0442477 6741 6300 60 790 300 4 5412 4106 P 24661534 652 32 4 022 493 435 436 5504 66177 557 40% 700 P 555 M 032 250 02117 242 0380 020 34 40 0214 000 Data table 59 Year 1 $ 262,000 Year 2 254,000 Year 3 222,000 Year 4 215,000 Year 5 200,000 Year 6 175,000 Print Done - X Requirements 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Holmes invest in the equipment? 2. Holmes could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $77,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Holmes 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.) Print Done 17 X K Holmes Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $910,000. 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.) Ordinary Annuity of $1 table.) Read the requirements. (Click the icon to view Present Value of Requirement 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Holmes invest in the equipment? Use the following table to calculate the net 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.) Years Year 1 Present value of each year's inflow: (n-1) Year 2 Present value of each year's inflow: (n-2) Year 3 Present value of each year's inflow: (n = 3) Year 4 Present value of each year's inflow: (n = 4) Year 5 Present value of each year's inflow: (n-5) Year 6 Present value of each year's inflow: (n = 6) Total PV of cash inflows Year 0 Initial investment Net present value of the project Net Cash PV Factor (i Inflow = 14%) Present Value