Petal Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $915,000 Projected net cash inflows are as follows: E (Click the icon to view the projected net cash inflows. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. Compute this project's NPV using Petal's 16% hurdle rate. Should Petal 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, XXXX. Use parentheses or a minus sign for a negative net present value.) PV Factor Net Cash Inflow Present Value Years (i -16%) 2 Present value of each year's Inflow. (n = 1) (n = 2) (n = 3) (n = 4) (n = 5) 3 4 5 6 (n=6) Total PV of cash inflows 0 Initial investment Net present value of the project Petal Industries invest in the equipment. Requirement 2. Petal could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $72,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $50,000 residual value at the end of year 7. Should Petal invest in nd refurbisht after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the I value of the project. (Enter any factor amounts to three decimal place Net Cash PV Factor Present Inflow (i = 16%) Value - . Data Table Year 1 260,000 Year 2 Year 3 250,000 223,000 215,000 205,000 Year 4 Year 5 Year 6 175,000 sipment Print Done uipment quipment could mally, the refurbished equipment would have a $50,000 residual value at the end ? (Hint: In addition to your answer to Requirement 1, discount the additional cas ter any factor amounts to three decimal places, XXXX. Use parentheses or a mir hen continue to the next question. Present Value of $1 Periods 1 2 3 4 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 0.962 0.925 0.889 0855 0.822 5% 0.952 0.907 0864 0823 0.784 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 0.917 0.842 0.772 0.708 0.650 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.638 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 6 7 8 9 10 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.456 0.400 0.351 0.308 0270 0.432 0.376 0.327 0.284 0247 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0275 11 12 13 14 15 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.527 0.497 0.469 0.442 0.417 0.350 0.319 0.290 0.263 0.239 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0494 0.475 0.456 0.475 0.444 0.415 0.388 0.362 0339 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0416 0.396 0.377 0237 0208 0.182 0.160 0.140 0.507 0.452 0.404 0.361 0.322 0287 0.257 0.229 0 205 0.183 0.163 0.146 0.130 0.116 0.104 0.429 0.397 0.368 0.340 0.315 0 292 0.270 0.250 0.232 0.215 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0317 16 17 18 19 20 16% 18% 20% 0.862 0847 0.833 0.743 0718 0.694 0.641 0609 0579 0552 0516 0482 0476 0437 0.402 0.410 0.370 0.335 0.354 0.314 0.279 0.305 0266 0233 0.263 0.225 0194 0227 0.191 0.162 0.196 0.162 0.135 0.168 0.137 0.112 0.145 0.116 0.093 0.125 0.099 0.078 0.108 0.084 0.065 0.093 0.071 0.054 0.080 0.060 0.045 0.069 0051 0.038 0.060 0.043 0.031 0.051 0.037 0.026 0044 0.031 0.022 0038 0026 0.018 0033 0 022 0.015 0.028 0.019 0.013 0.024 0.016 0.010 0.021 0.014 0.009 0.018 0.0110.007 0016 0.010 0.006 0014 0.008 0006 0.012 0.007 0.004 0.003 0.001 0.001 0.001 0.853 0.844 0.836 0.828 0.820 0.728 0.714 0.700 0.686 0.673 0.623 0.605 0.587 0.570 0.554 0.394 0.371 0.350 0.331 0.312 0.252 0.231 0212 0.194 0.178 0.296 0218 0.198 0.180 0.164 0.149 0.123 0.108 0 095 0.083 0073 0.277 0.258 21 22 23 24 26 0.294 0.278 0262 0.247 0.233 0.164 0.150 0.138 0.126 0.116 0.811 0 803 0.795 0.788 0.780 0.772 0.764 0.757 0.749 0.742 0672 0.608 0.660 0.647 0.634 0.622 0.610 0.598 0.586 0.574 0.563 0.552 0.453 0372 0.538 0.522 0507 0.492 0.478 0.464 0.450 0.437 0424 0.412 0.439 0.422 0.406 0.390 0.375 0.361 0.347 0.333 0321 0.308 0 208 0 141 26 27 28 29 30 0.359 0.342 0.326 0.310 0.295 0.281 0.268 0255 0.243 0.231 0.142 0.087 0.199 0.184 0.170 0.158 0.146 0.135 0.125 0.116 0.107 0.099 0.242 0.226 0.211 0.197 0.184 0.172 0.161 0.150 0.141 0.131 0.067 0.034 0.064 0.056 0.049 0.043 0.038 0.033 0.029 0.026 0.022 0.020 0.053 0.046 0.040 0.035 0.030 0.026 0.023 0.020 0.017 0015 0.220 0.207 0.196 0.185 0.174 0.135 0.093 0.123 0.083 0.112 0.074 0.102 0.066 0.092 0.059 0.084 0.053 0.076 0.047 0.069 0.042 0.063 0.037 0.057 0.033 0.022 0.011 0.009 0.003 0.106 0.098 0.090 0.082 0.075 0.005 0.032 0.046 0004 0.001 40 0.097 0.054 0.307 0.228 0.021 0.013 0001 50 Print Done Periods 1 2 3 4 5 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 15% 16% 0.870 0852 1.626 1.605 2.283 2246 2.855 2798 3.352 3.274 18% 20% 0.847 0.833 1566 1.528 2.174 2.106 2.690 2.589 3.127 2 991 3.498 3.326 3.812 3.605 4.078 3.837 4.303 4031 4.494 4.192 6 7 00 4.564 4.968 5.328 5.650 3.685 4,039 4.344 4.607 4.833 9 10 3.889 4.288 4639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 11 12 13 14 15 5.938 6.194 6.424 6.628 6.811 5.029 5.197 5.342 5.468 5.575 4.327 4.439 4.533 4611 4.675 Present Value of Ordinary Annuity of $1 1% 2% 3% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.941 2.884 2.829 2.775 2.723 2673 2.624 2577 2.531 2.487 3.902 3.808 3.717 3.630 3.546 3465 3387 3.312 3240 3.170 4853 4713 4580 4,452 4329 4.212 4.100 3.993 3.890 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4 486 4355 6.728 6.472 6.230 6002 5.786 5.582 5.389 5.206 5.033 4.868 7.652 7325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.134 11.348 10.635 9.986 9.394 8.853 8 358 7.904 7.487 7.103 13.004 12.106 11.296 10.563 9.899 9295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.57812561 11652 10.838 10.1069.447 8.851 7824 15.562 14.292 13.166 12 166 11.274 10.477 9.763 9.122 8.544 8,022 16.398 14.992 13.754 1265911.690 10.828 10.0599.372 8.756 8.201 17.226 15.678 14 32413.13412085 11.158 10.338 9.604 8.950 8.365 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 18,857 17 011 15.415 14.029 12821 11.764 10836 10.017 | 9.292 8.649 19.660 17.658 15.937 14 451 13.163 12.042 11.061 10 201 9.442 8.772 8.883 9.580 20.456 18.29216 444 14.857 13.489 12.3031127210 371 21.243 18.914 16.936 15 247 13.799 12.550 11.469 10.529 9.707 8.985 9.077 22.023 19.52317 413 15 622 14 094 12.783 11654 10.675 9.823 9.929 9.161 22.795 20.121 17 877 15 983 14 375 13.003 11.826 10 810 11.987 10 935 10.027 9.237 23.560 20.707 18.327 16,330 14.643 13.211 9.307 24 316 21.28118.764 16,663 14.898 13.406 12.13711051 10.116 9.370 25 066 21.844 19.188 16.984 15.141 13.591 12 278 11.158 10.198 9.427 25.808 22 396 19 600 17.292 15.372 13.765 12.409 11 258 10 274 9.779 32 835 27 355 23.115 19.793 17 159 15.046 13.332 11.925 10.757 9.915 39.196 3142425.730 21.482 18.256 15.762 13.801 12 233 10.962 4.656 4.793 4.910 5008 5.092 5.162 5.222 5.273 5.316 5.353 8.313 16 17 18 19 20 6.974 7.120 7.250 7.366 5.964 6.047 6.128 6.198 6.259 5.669 6.749 5.818 5.877 5.929 4730 4.775 4812 4.844 4870 7.469 6.265 6.373 6467 6.550 6.623 6.687 6.743 6.792 6.835 6.873 21 22 23 24 25 7.562 7.645 7.718 7.784 7.843 5.973 6.011 6.044 6.073 6.097 4.891 4.909 4.925 4.937 4.948 6.312 6.359 6.399 6.434 6.464 6.491 6.514 6.534 6.551 6.566 5.384 5.410 5.432 5.451 5.467 6.480 5.492 5.502 5.510 5.517 26 27 28 29 30 7.896 7.943 7.984 8,022 6.906 6.935 6.961 6.983 7.003 6.118 6.136 6.152 6.166 6.177 6233 4.956 4.964 4970 4.975 4.979 8.055 7.105 6.642 5.548 4997 40 8 244 8.304 7.133 6.661 6 246 5.554 4999 50 Total PV of cash inflows Initial investment Net present value of the project Petal Industries invest in the equipment. should Requirement 2. $72,000 of net c. the equipment al present value.) h the equipment at the end of si Additionally, the refurbished ec six years? (Hint: In addition to yo should not Requirement 2. Petal could refurbish the equipment at the end of six years for $104,000 The refurbished equipment could be used one more year, providing $72,000 of net cash inflows in year 7 Additionally, the refurbished equipment would have a $50,000 residual value at the end of year 7. Should Petal 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) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, XXXX Use parentheses or a minus sign for cash outflows and for a negative net present value.) Present Cash (outflow)linflow PV Factor (i -16%) Value Refurbishment at the end of Year 6 (n = 6) Cash inflows in Year 7 (n = 7) Residual value (n=7) Net present value of the refurbishment The refurbishment provides a NPV. The refurbishment NPV is to overcome the original NPV of the equipment. Therefore, the refurbishment alter Petal Industries' original decision regarding the equipment investment Enter any number in the edit fields and then continue to the next question Residual value (n = 7) Net present value of the refurbishment The refurbishment provides a refurbishment alt NPV. The refurbishment NPV is to overcome the origin 'original decision regarding the equipment investment. negative positive ontinue to the next question. Enter any number in the edit te the NPV of the refurbishment. (Enter any factor amounts U Live net present value.) Cash PV Factor Present (outflow)/inflow (i = 16%) Value pishment at the end of Year 6 (n = 6) inflows in Year 7 (n = 7) dual value (n = 7) present value of the refurbishment to overcome the refurbishment provides a NPV. The refurbishment NPV is rbishment alter Petal Industries' original decision regardir nt. er any number in the edit fields and then continue to the next ques large enough not large enough Cash PV Fa (outflow)/inflow (i = 16 Refurbishment at the end of Year 6 (n = 6) Cash inflows in Year 7 (n = 7) Residual value (n = 7) Net present value of the refurbishment The refurbishment provides a NPV. The refurbishment NPV is refurbishment alter Petal Industries' original decision regarding the equ Enter any num should s and then continue to the next question. should not