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Present Value of $1.00 Present Value of an Annuity of $1.00 4 % 6 % 8 % 10% 11% 12% 2 Period 3 % 5
Present Value of $1.00 Present Value of an Annuity of $1.00 4 % 6 % 8 % 10% 11% 12% 2 Period 3 % 5 % 7 % 9% 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 | 1 0.971 | 0.962 |0.952 | 0.943 0.935 0.926 | 0.917 || 0.909 | 0.901 | 0.893 | 0.943 | 0.925 0.907 || 0.890 | 0.873 | 0.857 | 0.842 0.826 0.812 0.797 2 1.913 | 1.886 || 1.859 | 1.833 | 1.808 | 1.783 | 1.759 | 1.736 1.713 | 1.690 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 2.829 2.775 2.723 2.673 2.624 2.577 2.531 | 2.487 2.444 2.402 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 4 | 3.717 || 3.630 | 3.546 3.465 | 3.387 || 3.312 | 3.240 | 3.170 || 3.102 || 3.037 | 5 | 0.863 || 0.822 | 0.784 || 0.747 | 0.713 | 0.681 || 0.650 | 0.621 |0.593 || 0.567 | 4.580 4.452 4.329 | 4.212 4.100 3.993 3.890 3.791 | 3.696 3.605 0.837 | 0.790 | 0.746 | 0.705 0.666 0.630 | 0.596 0.564 0.535 0.507 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 7 | 0.813 | 0.760 | 0.711 | 0.665 | 0.623 0.583 | 0.547 | 0.513 | 0.482 | 0.452 7 | 6.230 | 6.002 || 5.786 | 5.582 | 5.389 |5.206 || 5.033 || 4.868 | 4.712 || 4.564 8 0.789 0.731 0.677 0.627 0.582 0.540 0.502 | 0.467 0.434 0.404 8 || 7.020 || 6.733 | 6.463 | 6.210 | 5.971 | 5.747 || 5.535 || 5.335 | 5.146 | 4.968 X Company currently buys 7,500 units of a part each year from a supplier for $7.60 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 $26,490 a year to make all 7,500 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.] DA: 0.03 B: 0.04 OC: 0.05 OD: 0.06 E: 0.07 F: 0.08 Submit Answer Tries 0/99
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