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18. Fimbrez Corporation has provided the following data concerning an investment project that it is considering:

Initial investment $380,000

Annual Cash Flow 124,000 per year

Expected life of the Project 4 years

Discount rate 10%

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table

The Net present value of the project is closet to:

12,956

380,000

(256,000)

(12,956)

19. (Ignore income taxes in this problem) The following data pertain to an investment proposal:

Cost of the investment	$32,000
Annual cost savings	$9,000
Estimated salvage value	$3,000
Life of the project	5 years
Discount rate	10%

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table

The net present value of the propsed investment is closest to:

3,982

2,119

1,863

20,000

21. The management of Londo Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 4 years. The company uses a discount rate of 20% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is ?$316,440. (Ignore income taxes in this problem)

Click here to view Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? (Round discount factor(s) to 3 decimal places and final answer to the nearest dollar amount.

316,440

122,225

79,110

63,288

22. (Ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $15,000, would be replaced by a new machine. The new machine would be purchased for $408,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $141,000 per year in cash operating costs. The simple rate of return on the investment is closest to

18.6%

17.9%

34.6%

16.7%

24. (Ignore income taxes in this problem.) Baldock Inc. is considering the acquisition of a new machine that costs $426,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are:

	Incremental Net Operating Income	Incremental Net Cash Flows
Year 1	$67,000	$148,000
Year 2	$73,000	$150,000
Year 3	$84,000	$175,000
Year 4	$47,000	$149,000
Year 5	$89,000	$151,000

Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to:

2.1years

5.0years

4.3years

2.7years