Present Value of $1.00 Present Value of an Annuity of $1.00 Period 1 2 0 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 .943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 Period 3% 1 0.971 2 1.913 3 2.829 4 3.717 4.580 6 5.417 7 6 .230 8 17.020 4% 5% 6% 7% 0.962 0.952 0.943 0.935 1.886 1.859 1.833 1.808 2.775 2.723 2.673 2.624 3.630 3.546 3.465 3.387 4.452 4.329 4.212 4.100 5.242 5.076 4.917 4.767 6.002 5.786 5.582 5.389 6.733 6.463 6.210 5.971 8% 9% 10% 11% 12% 0.926 0.917 0.909 0.901 0.893 1.783 1.759 1.736 1.713 1.690 2.577 2.531 2.487 2.444 2.402 3.312 3.240 3.170 3.102 3.037 3.993 3.890 3.791 3.696 3.605 4.623 4.486 4.355 4.231 4.111 5.206 5.033 4.868 4.712 4.564 5.747 5.535 5.335 5.146 | 4.968 8 1 X Company currently buys 6,500 units of a part each year from a supplier for $8.60 per part, but it is considering making the part instead. In order to make the part, X Company will have to buy equipment that will cost $150,000. The equipment will last for 6 years, at which time it will have zero disposal value. X Company estimates that it will cost $27,285 a year to make all 6,500 units. What is the approximate rate of return if X Company makes the part instead of buying it from the supplier? [Note: 0.03 means 3%, etc.) E: 0.07 OF: 0.08 A: 0.03 B: 0.04 C: 0.05D: 0.06 Submit Answer Tries 0/99