Present Value of $1.00 Period 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 2 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 3 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 4 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 5 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 6 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 7 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 8 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 Present Value of an Annuity of $1.00 Period 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 2 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 3 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 4 3.717 3.630 || 3.546 3.465 | 3.387 3.312 3.240 3.170 3.102 3.037 3.696 | 3.605 5 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 6 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 7 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 8 7.020 6.733 6.463 6.210 5.971 5.747 | 5.535 5.335 5.146 4.968 X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $63,000 per year; operating costs with the new machine are expected to be $44,000 per year. The new machine will cost $70,000 and will last for 5 years, at which time it can be sold for $3,000. The current machine will also last for 5 more years but will have zero salvage value. Its current disposal value is $4,000. Assuming a discount rate of 6%, what is the net present value of replacing the current machine? [Note: For the capital budgeting questions, use the Present Value tables in the Coursepack or with the link after the last exam question.] A: $8,330 B: $10,412 OC: $13,015| OD: $16,269| OE: $20,336|| OF: $25,420 Submit Answer Tries 0/99