Problem 4: Present Value TablesFill in

PV of $1		PV of Annuity of $1
Periods 9%		Periods 9%
1 0.9174		1 0.9174
2 0.8417		2 1.7591
3 0.7722		3 2.5313

Problem 1: Watson Manufacturing has an opportunity to invest $96,000 in a new machine. The new machine will result in cost savings of $25,000 in year 1, $25,000 in year 2, $25,000 in year 3, $25,000 in year 4, and $25,000 in year 5. The new machine will require a tune-up in year 3 costing $3,000. The salvage value of the machine will be $10,000 at the end of year 5. Watson's cost of capital is 10%. Create a table showing the cash flows in each year of the project and compute the NPV.

0	1	2	3	4	5

The NPV is: $_____________________Is the investment acceptable? ___________