PRESENT VALUE TABLES The management of Green Company is considering to purchase an equipment to be attached with the main manufacturing machine. The equipment will cost $75,000 and will increase annual cash-inflows by $22,000. The useful life of the equipment is 6 years. After 6 years it will have $10,000 salvage value. The management wants a 10% return on all investments. Present value of one dollar Period 1% 3% 4% 5% 5 6% 7% 2% 0.980 1 0.990 0.971 0.943 0.952 0.907 2 Compute net present value (NPV) of this investment project. NOTE: PRESENT VALUE TABLES ARE POSTED ON THE RIGHT, SLIDE OVER or UP/DOWN TO VIEW TABLE VALUES. 0.980 0.971 0.962 0.925 0.889 0.961 0.942 0.924 0.935 0.873 0.816 3 0.864 0.915 0.888 0.943 0.890 0.840 0.792 0.747 0.705 4 0.961 0.855 0.823 5 0.906 0.863 0.784 0.951 0.942 0.822 0.790 0.763 0.713 0.666 O A. $3,384 6 0.888 0.837 0.746 0.711 OB. 26.457 7 0.933 0.871 0.813 0.760 0.665 8 0.923 0.853 0.789 0.731 0.677 OC. $75,000 OD. $99.810 0.623 0.582 0.544 0.508 9 0.914 0.905 0.837 0.820 0.766 0.744 0.703 0.676 0.627 0.592 0.558 0.645 0.614 10 Table of Present Value Annuity Factor Number of periods 1% 0.9901 1.9704 2% 0.9804 1.9416 1 2 3% 0.9709 1.9135 Interest rate 5% 6% 0.9524 0.9434 1.8594 1.83341 4% 0.9615 1.8861 0. PRESENT VALUE TABLES Present value of one dollar Period 1% 2% 3% 4% 7% 8% 9% 10% 1 0.990 0.980 0.917 0.980 0.961 0.971 0.943 6% 0.943 0.890 0.962 0.925 0.889 5% 0.952 0.907 0.864 0.823 0.935 0.873 0.926 0.857 N 0.909 0.826 0.842 3 0.971 0.942 0.915 0.840 0.794 0.772 3 4 0.816 0.763 0.751 0.683 0.961 0.924 0.888 0.855 0.792 0.735 0.708 5 0.951 0.906 0.784 0.747 0.713 0.650 0.863 0.837 0.681 0.630 6 09 0.942 0.746 0.596 0.822 0.790 0.760 0.731 0.888 0.871 0.853 0.666 0.623 7 0.621 0.564 0.513 0.933 0.705 0.665 0.627 0.813 0.711 0.547 0.583 0.540 CO 0.923 0.677 0.582 0.502 0.467 0.789 0.766 9 0.837 0.645 0.592 0.544 0.500 0.460 0.914 0.905 0.703 0.676 0.424 0.386 10 0.820 0.744 0.614 0.558 0.508 0.463 0.422 Table of Present Value Annuity Factor Number of periods 4% 7% 1% 0.9901 1 2 3 0.9346 1.808 2.6243 9% 0.9174 1.7591 2.5313 10% 0.9091 1.7355 2.4869 4 1.9704 2.941 3.902 4.8534 5.7955 6.7282 7.6517 8.566 9.4713 5 6 7 8 9 10 2% 0.9804 1.9416 2.8839 3.8077 4.7135 5.6014 6.472 7.3255 8.1622 8.9826 3% 0.9709 1.9135 2.8286 3.7171 4.5797 5.4172 6.2303 7.0197 7.7861 8.5302 0.9615 1.8861 2.7751 3.6299 4.4518 5.2421 6.0021 6.7327 7.4353 8.1109 Interest rate 5% 6% 0.9524 0.9434 1.8594 1.8334 2.7232 2.673 3.546 3.4651 4.3295 4.2124 5.0757 4.9173 5.7864 5.5824 6.4632 6.2098 7.1078 6.8017 7.7217 7.3601 3.3872 4.1002 4.7665 5.3893 5.9713 6.5152 7.0236 8% 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 3.2397 3.8897 4.4859 5.033 5.5348 5.9952 6.4177 3.1699 3.7908 4.3553 4.8684 5.3349 5.759 6.1446