Problem 4: Page 461, P10-6, NPV (30 points) Calculator or Table A-4 Pages 440 - 442 in textbook shows how to solve using calculator or excel; you can also use the financial tables to solve. Refer to example problem P10-5 from the chapter 10 class work sheets on blackboard NPV = Present value of cash inflows from project - Initial investment. Solve for present value, then subtract initial investment to get answer for NPV then decide to accept or reject, if NPV is a positive number accept; if it is negative number then reject All projects have 8-year lives, an initial cost of $360,000, and annual cash inflows of $62,650. Find NPV for A, B, and then write whether you accept or reject (1)A: NPV= Initial investment: $360,000 (2) Accept or reject Annual cash flow: $62,650 Life of project: 8 Cost of capital: 6% =$62,650 x (table value, 6%, 8 yrs) then subtract 360,000 NPV =$ B: NPV = Initial investment: $360,000 Accept or reject Annual cash flow: $62,650 Life of project: 8 Cost of capital: 8% =$62,650 x (table value, 8%, 8yrs) then subtract 360,000 NPV- C: NPV = initial investment: $360,000 Accept or reject Annual cash flow: $62,650 Life of project: 8 Cost of capital: 10% =$62,650 x (table value 10%, 8 yrs) then subtract 360,000 NPV= Problem 5: Book value and recaptured depreciation (14 points) Similar to E11-4 Current Enterprise invested in purchasing a new inventory system which cost $324,400 installed. Since that purchase depreciation has totaled $294,000. A. What is the current book value of the system? Installed cost-depreciation = B. If the system sold for $115,000, how much recaptured depreciation would result? Sales price - current book value =