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 Present Annuity PV Factor (i=16%, n=8) Years Inflow Value Requirements 1-8 Present value of annuity 0 Investment Net present value 1. Compute the water treatment system's NPV. 2. Find the water treatment system's IRR (exact percentage is not required) 3. Should Power-max buy the water treatment system? Why? Requirement 2. Find the water treatment system's IRR (exact percentage is not required). The IRR (internal rate of return) is between Print Done Requirement 3. Should Power-max buy the water treatment system? Why? Power - max buy the water treatment system. It has a V NPV, and its IRR the company's required rate of return. . i Reference Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Present Value of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.990 0.980 0.971 0.962 0.9520.943 0.935 0.926 0.917 0.9090.8930.877 0.870 0.862 0.847 0.833 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.7940.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.961 0.9240.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.942 0.888 0.837 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.923 0.853 0.789 0.731 0.677 0.627 0.5820.540 0.502 0.467 0.4040.351 0.327 0.305 0.266 0.233 0.914 0.837 0.766 0.703 0.6450.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.896 0.8040.722 0.650 0.585 0.527 0.475 0.429 0.3880.350 0.287 0.237 0.215 0.195 0.162 0.135 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.3260.290 0.229 0.182 0.163 0.145 0.116 0.093 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.2390.183 0.140 0.123 0.1080.084 0.065 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.1980.146 0.108 0.093 0.080 0.060 0.045 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.1940.164 0.116 0.083 0.070 0.060 0.043 0.031 0.820 0.673 0.554 0.456 0.377 0.3120.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 0.811 0.660 0.538 0.439 0.359 0.2940.242 0.1990.1640.135 0.093 0.064 0.053 0.044 0.031 0.022 0.803 0.647 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 0.795 0.634 0.507 0.4060.3260.262 0.211 0.1700.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 0.788 0.622 0.492 0.390 0.310 0.247 0.197 0.158 0.126 0.1020.066 0.043 0.035 0.028 0.019 0.013 0.780 0.610 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.0590.038 0.030 0.024 0.016 0.010 0.772 0.598 0.464 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 0.764 0.586 0.450 0.347 | 0.268 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.018 0.011 0.007 16 17 18 19 20 21 22 23 24 25 26 27 i Reference Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 1.970 1.942 1.913 1.886 1.859 1.8331.808 1.783 1.759 1.736 1.690 1.647 1.626 1.605 1.566 1.528 2.9412.884 | 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2402 2.322 2.283 2.246 2.174 2.106 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798 2.690 2.589 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 5.795 5.601 5.417 5.2425.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 3.812 3.605 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.7475.535 5.335 4.968 4.6394.487 4.344 4.078 3.837 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.7724.6074.303 4.031 9.471 8.9838.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4.192 10.368 9.7879.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4.327 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.5367.161 6.814 6.194 5.660 5.4215.197 4.793 4.439 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.8425.583 5.342 4.910 4.533 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.6286.002 5.724 5.468 5.008 4.611 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.6066.811 6.142 5.8475.575 5.092 4.675 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.8246.9746.265 5.9545.669 5.162 4.730 15.562 14.292 13.166 12.166 | 11.274 10.4779.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.7568.201 7.250 6.467 | 6.128 5.818 5.273 4.812 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.316 4.844 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.469 6.623 6.259 5.9295.353 4.870 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 7.562 6.687 6.3125.973 5.384 4.891 19.660 17.658 15.937 | 14.451 13.163 12.042 11.061 10.201 9.442 8.772 7.645 6.743 6.359 6.011 5.410 4.909 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.5808.883 7.718 6.792 6.3996.044 5.432 4.925 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6.835 6.4346.073 5.451 4.937 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.8239.077 7.843 6.8736.464 6.097 5.467 4.948 22.795 20.121 | 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161 7.8966.906 6.491 6.118 5.480 4.956 23.560 1 20 707 18 327 16 330 1 14 043 1 13 211 11 987 | 10 935 10 027 9237 7043 6.935 6514 6 136 5492 4 964 16 17 18 19 20 21 22 23 24 25 26 27