Power - max is considering buying a new water treatment system for its plant in Austin, Texas. The investment proposal passed the initial screening tests (payback and accounting rate of return) so the company now wants to analyze the proposal using the discounted cash flow methods. The water treatment system costs $52,800, has a eight-year life, and has no residual value. The estimated net cash inflows from environmental cleanup savings are $11,000 per year over its life. The company's required rate of return is 16%. (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 the water treatment system's NPV. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative NPV.) Net Cash Annuity PV Factor Present Years Inflow (i=16%, n=8) Value 1-8 Present value of annuity 0 Investment Net present value Requirement 2. Find the water treatment system's IRR (exact percentage is not required). The IRR (internal rate of return) is between Requirement 3. Should Power - max buy the water treatment system? Why? Power - max buy the water treatment system. It has a NPV, and its IRR the company's required rate of return. 12% 2 Periods 1% 1 10.990 10.980 10.971 4 10.961 5 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 10.943 10.890 10.840 0.792 0.747 17% 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 14% 0.877 0.769 0.675 0.592 0.519 0.893 0.797 0.712 0.636 10.567 15% 0.870 0.756 0.658 0.572 0.497 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 3 6 8 9 10 0.942 0.933 10.923 10.914 10.905 0.888 0.871 0.853 0.837 0.820 0.837 10.813 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 10.705 10.665 10.627 0.592 10.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.596 0.547 10.502 0.460 0.422 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.432 0.376 0.327 0.284 0.247 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 ||| 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 10.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.557 0.530 0.505 0.481 10.527 0.497 0.469 10.442 0417 0.475 0.444 0.415 0.388 10.362 0.429 0.397 0.368 0.340 0.315 0.388 0.356 0.326 0.299 0.275 0.350 0.319 0.290 0.263 0.239 10.287 10.257 0.229 0.205 10.183 0.237 0.208 0.182 0.160 0.140 0.215 0.187 0.163 0.141 0.123 0.162 0.137 0.116 0.099 0.084 0.135 10.112 0.093 0.078 0.065 0.054 0.045 16 17 18 19 20 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 0.534 0.513 0.494 0.475 0.456 0.458 0.436 0.416 0.396 0.377 0.394 0.371 0.350 0.331 0.312 0.292 0.270 0.250 0.232 10.252 0.231 0.212 0.194 0.178 0.218 0.198 0.180 0.164 0.149 0.163 0.146 0.130 0.116 10.104 0.123 0.108 0.095 0.083 0.073 0.107 0.093 0.081 0.070 0.061 0.093 0.080 0.069 0.060 0.051 0.071 0.060 0.051 0.043 0.037 0.038 0.031 0.215 0.026 0.339 0.317 0.296 0.277 0.258 0.242 0.226 0.211 0.197 0.184 21 22 23 24 25 0.811 0.803 0.795 0.788 10.780 0.660 0.647 0.634 0.622 0.610 0.538 0.522 0.507 10.492 0.478 0.439 0.422 0.406 0.390 0.375 0.359 0.342 0.326 0.310 0.295 0.294 10.278 0.262 10.247 0.233 0.199 0.184 0.170 0.158 0.146 0.164 0.150 0.138 10.126 0.116 0.135 0.123 0.112 0.102 0.092 10.093 0.083 0.074 10.066 0.059 0.064 0.056 0.049 0.043 0.038 0.053 0.046 0.040 0.035 0.030 0.044 0.038 0.033 0.028 0.024 0.031 0.026 0.022 0.019 0.016 10.022 0.018 0.015 0.013 0.010 0.772 0.220 0.764 0.207 26 27 28 29 130 0.757 0.749 0.742 0.598 0.586 0.574 0.563 0.552 10.464 0.450 0.437 0.424 0.412 0.361 0.347 0.333 0.321 0.308 0.281 0.268 0.255 0.243 0.231 0.196 0.185 0.174 0.172 0.161 0.150 0.141 0.131 0.135 0.125 0.116 0.107 0.099 0.106 0.098 0.090 0.082 0.075 0.084 0.076 0.069 0.063 0.057 0.053 0.047 10.042 0.037 10.033 0.033 0.029 0.026 0.022 0.020 0.026 0.023 0.020 0.017 0.015 0.021 0.018 0.016 0.014 0.012 0.014 0.011 0.010 0.008 10.007 0.009 10.007 0.006 0.005 0.004 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.011 0.005 0.004 0.003 0.001 0.001 50 10.608 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.003 0.001 0.001 0.001 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 3 2.829 3.498 3.812 3.889 4.288 4.639 4.946 5.216 3.784 4.160 4.487 4.772 5.019 3.685 4.039 4.344 4.607 4.833 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.453 5.660 5.842 6.002 6.142 5.234 5.421 5.583 5.724 5.847 5.029 5.197 5.342 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 5.468 5.575 Periods 1% 2% 3% 4% 5% 16% 7% 8% 9% 10% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 2.941 2.884 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3312 3.240 3.170 3.037 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 9 8.566 88.162 7.786 7.435 7.108 6.802 6.515 66.247 5.995 5.759 5.328 10 9.471 8.983 18.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 11 10.368| 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 12 11.255] 10.57519.954 9.385 8.863 8.384 7.943 7.536 7.161 66.814 6.194 13 12.134 | 11.348| 10.635] 9.986 9.394 18.853 8.358 7.904 7.487 7.103 6.424 14 13.004 | 12.106 | 11.296 | 10.563] 9.899 9.295 8.745 8.244 7.786 7.367 6.628 15 13.865] 12.849| 11.938] 11.118|10.380] 9.712 9.108 8.559 8.061 7.606 6.811 16 14.718 | 13.578 | 12.561| 11.652 | 10.838| 10.106 | 9.447 8.851 8.313 7.824 6.974 17 15.562 | 14.292 | 13.166 | 12.166 | 11.274| 10.477] 9.763 9.122 8.544 8.022 7.120 18 16.398 | 14.992 | 13.754 | 12.659 | 11.690 | 10.828 | 10.059 9.372 8.756 8.201 7.250 19 17.226| 15.678] 14.324 13.134 | 12.085] 11.158| 10.336 9.604 8.950 8.365 7.366 20 18.046| 16.351| 14.877] 13.590 | 12.462 | 11.470] 10.594 9.818 9.129 8.514 17.469 21 18.857117.011115.415| 14.029 | 12.82111.764] 10.836 | 10.017 9.292 8.649 7.562 22 19.660 | 17.658| 15.937 14.451| 13.163|12.042 | 11.061 | 10.201 9.442 8.772 17.645 123 20.456 | 18.292 | 16.444 | 14.857] 13.489 | 12.303] 11.272 | 10.371 9.580 8.883 7.718 24 21.243 | 18.914| 16.936 | 15.247] 13.799| 12.550 | 11.469 | 10.529 9.707 8.985 7.784 25 122.023 | 19.523] 17.413 15.622 | 14.094 | 12.783 | 11.654 | 10.675 9.823 9.077 17.843 26 22.795 | 20.121 17.877 15.983 | 14.375| 13.003 | 11.826|10.810] 9.929 9.161 7.896 27 23.560 | 20.707 | 18.327 | 16.330 | 14.643 | 13.211 | 11.987 | 10.935 10.027 9.237 7.943 28 24.316 | 21.281| 18.764 | 16.663 | 14.898 | 13.406 | 12.137 | 1.051 10.116 9.307 7.984 29 25.066 | 21.84] 19.188 16.984] 15.1411 13.591 12.278] 11.158 | 10.198 9.370 8.022 30 25.808 | 22.396 | 19.600 | 17.292 | 15.372 | 13.765| 12.409 | 11.258 | 10.274] 9.427 8.055 40 32.835 | 27.355| 23.115| 19.793117.159 | 15.046| 13.332] 11.925| 10.757 9.779 88.244 4.730 4.775 6.265 6.373 6.467 6.550 6.623 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 5.162 5.222 5.273 5.316 5.353 4.812 4.844 4.870 6.687 6.743 6.792 6.835 6.873 6.312 6.359 6.399 6.434 6.464 5.973 6.011 6.044 6.073 6.097 5.384 5.410 5.432 5.451 5.467 4.891 4.909 4.925 4.937 4.948 6.906 6.935 6.961 6.983 7.003 6.491 6.514 6.534 6.551 6.566 6.642 6.118 6.136 6.152 6.166 6.177 6.233 5.480 5.492 5.502 5.510 5.517 4.956 4.964 4.970 4.975 4.979 7.105 5.548 4.997 50 39.196 | 31.424 | 25.730 | 21.482 | 18.256| 15.762 | 13.801 | 12.233] 10.962 | 9.915 88.304 7.133 6.661 6.246 5.554 4.999