Present Value of $1 Present Value of Annuity of $1.00 in Arrears Requirements 1. Given the preceding information, what is the net present value (NPV) of the new equipment? Ignore taxes. 2. Assume the $70,000 cost savings are in current real dollars and the inflation rate is 2%. Recalculate the NPV of the project. 3. Based on your answers to requirements 1 and 2 , should Delish buy the new checkout equipment? 4. Now assume that the company's tax rate is 35%. Calculate the NPV of the equipment assuming no inflation. 5. Again assuming that the company faces a 35% tax rate, calculate the NPV of the equipment under an inflation rate of 2%. 6. Based on your answers to requirements 4 and 5 , should Delish buy the new checkout equipment? Delish is considering replacing 20 of their checkout registers with new self-checkout equipment. negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is Assuming an inflation rate of 2%, The net present value is Requirement 3. Based on your answers to requirements 1 and 2 , should Delish buy the new checkout equipment? Based on the assumptions in requirements 1 and 2, Delish buy the new checkout equipment because Delish may also want to consider negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) Assuming a tax rate of 35%, The net present value is Assuming a tax rate of 35% and an inflation rate of 2%, The net present value is Requirement 6 . Based on your answers to requirements 4 and 5 , should Delish buy the new checkout equipment? Based on the assumptions in requirements 4 and 5 , Delish 7 buy the new checkout equipment because If a careful review of the forecasted inflation rate results in a rate of inflation, Delish should recalculate the NPV to determine whether the purchase of the checkout equipment is in its best interest. Present Value of $1 Present Value of Annuity of $1.00 in Arrears Requirements 1. Given the preceding information, what is the net present value (NPV) of the new equipment? Ignore taxes. 2. Assume the $70,000 cost savings are in current real dollars and the inflation rate is 2%. Recalculate the NPV of the project. 3. Based on your answers to requirements 1 and 2 , should Delish buy the new checkout equipment? 4. Now assume that the company's tax rate is 35%. Calculate the NPV of the equipment assuming no inflation. 5. Again assuming that the company faces a 35% tax rate, calculate the NPV of the equipment under an inflation rate of 2%. 6. Based on your answers to requirements 4 and 5 , should Delish buy the new checkout equipment? Delish is considering replacing 20 of their checkout registers with new self-checkout equipment. negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is Assuming an inflation rate of 2%, The net present value is Requirement 3. Based on your answers to requirements 1 and 2 , should Delish buy the new checkout equipment? Based on the assumptions in requirements 1 and 2, Delish buy the new checkout equipment because Delish may also want to consider negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) Assuming a tax rate of 35%, The net present value is Assuming a tax rate of 35% and an inflation rate of 2%, The net present value is Requirement 6 . Based on your answers to requirements 4 and 5 , should Delish buy the new checkout equipment? Based on the assumptions in requirements 4 and 5 , Delish 7 buy the new checkout equipment because If a careful review of the forecasted inflation rate results in a rate of inflation, Delish should recalculate the NPV to determine whether the purchase of the checkout equipment is in its best interest