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1 The management of Penfold Corporation is considering the purchase of a machine that would cost $320,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $76,000 per year. The company requires a minimum pretax return of 12% on all investment projects. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to (Ignore income taxes.): proposed project is closest to (Ignore income taxes.): 1 Multiple Choice $(46,020) O $(6,020) O $(122,020) O $(319,997) 2 Crowl Corporation is investigating automating a process by purchasing a machine for $795,600 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,400. The annual depreciation on the new machine would be $88,400. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) 2 Multiple Choice O 11.14% O 16.74% 5.89% 5.14% EXHIBIT 128-1 Present Value of $1: (+ Periods 4% 5% 6% 7% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0797 0783 0.769 0.756 0743 0731 0.718 0706 0.694 0683 0672 0661 0.650 0.640 3 0889 0.864 0.840 0816 0794 0772 0751 0731 07120693 0675 0658 0641 0624 0609 0.593 0.579 0564 0551 0537 0.524 0512 4 0.855 0.823 0.792 0763 0735 0.708 0.683 0659 0.636 0.613 0.592 0.572 0552 0534 0516 0.499 0482 0.467 0.451 0.437 0423 0410 5 0.822 0.784 0.747 0.713 0681 0.650 0.621 0.593 0567 0.543 0.519 0.497 0.476 0.456 0437 0.419 0402 0.386 0.370 0355 0.341 0.328 6 0.790 0.746 0.705 0666 0630 0.596 0.564 0.535 0.507 0.480 0456 0432 0.410 0390 0.370 0352 0.335 0.319 0.303 0289 0.275 0.262 7 0.750 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.375 0.354 0.333 0.314 0296 0.279 0.263 0.249 0235 0.222 0.210 8 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0249 0.233 0.218 0.204 0.191 0.179 0.168 9 0.703 0645 0.592 0544 0500 0.460 0424 0.391 0361 0333 0.308 0.284 0263 0243 0225 0209 0.194 0.180 0.167 0.155 0.144 0134 10 0676 0614 0.558 0508 0.463 0.422 0.386 0.352 0322 0295 0.270 0247 0227 0208 0191 0176 01620149 0137 0126 0.116 0107 11 0650 0.585 0.527 0.475 0429 0.388 0.350 0.317 0287 0261 0237 02150195 0.178 0.162 0148 0135 012301120103 0.094 0.086 12 0.625 0.557 0.497 0444 0397 0356 0.319 0286 0257 0231 0208 0.187 0168 0152 0137 0124 01120102 0.092 0.083 0.076 0.069 13 0.601 0.530 0.469 0415 0.368 0.326 0.290 0.258 0229 0.204 0.182 0163 01450130 0.116 0104 0.093 0.084 0.075 0.068 0.061 0.055 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 15 0.555 0.481 0.417 0.362 0.315 0275 0.239 0.209 0183 0160 014001230108 0.095 0.084 0.074 0.065 0057 0.051 0.045 0.040 0.035 16 0.534 0.458 0.394 0.339 0.292 0252 0.218 0.188 0163 0.141 0.123 0107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.371 0.317 0.270 0231 0.198 01700146 01250108 0.093 0.080 0.069 0.060 0.052 0045 0.039 0034 0.030 0.026 0.023 18 0.494 0.416 0.350 0.296 0250 0212 0.180 0153 0130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0038 0032 0.028 0.024 0.021 0.018 19 0.475 0.396 0.331 0.277 0232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 20 0.456 0.377 0.312 0.258 0215 0.178 0.149 0.124 0104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 21 0.439 0.359 0.294 0242 0.1990.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.0110.009 22 0.422 0.342 0.278 0226 0.184 0150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 23 0.406 0.326 0262 0211 01700138 0112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0.390 0.310 0247 0197 0158 0126 0102 0082 0.066 0.053 0.043 0.035 0.028 0.023 0019 0015 0013 0010 0.008 0.007 0.006 0.005 25 0.375 0295 0.233 01840146 0.116 0.092 0.074 0.059 0.047 0038 0.030 0.024 0.020 0.0160.013 0010 0.009 0.007 0.006 0.005 0.004 26 0361 0281 0220 0172 01350106 0084 0.066 0053 0042 0033 0026 0.021 0.017 0014 0011 0009 0.007 0.006 0.005 0004 0.003 27 0.347 0268 0.207 0.161 0125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 28 0.333 0 255 0.196 0150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 29 0.321 0243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 30 0308 0231 0.174 0131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0,015 0,012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 40 0208 0.142 0.097 0067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears: Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25 1 0.962 0.952 0943 0.935 0.926 0.917 0.909 0.901 0.893 0885 0877 0.870 0.862 0.855 0847 0.840 0.833 0826 0.820 0.813 0806 0.80 2 1.886 1859 1833 1808 1783 1759 1736 1713 1.690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1.474 1457 144 3 2.775 2723 2673 2.624 2577 2.531 2487 2.444 2.402 2361 2322 2.283 2246 2210 2.174 2140 2106 2.074 2.042 2.011 1981 195 4 3.630 3.546 3.465 3.387 3.312 32403170 3102 3.037 2974 2914 2.855 2798 2743 2690 2639 2589 2540 2494 2448 2404 2.36 5 4452 4329 4212 4100 3.993 3.890 3.791 3.696 3.605 3517 3.433 3.352 3274 3199 3127 3.058 2.991 2.926 2864 2803 2745 268 6 5.242 5.076 4917 4767 4623 4.486 4355 4231 4111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.99 7 6.002 5786 5582 53895206 5033 4868 4712 4564 4423 4288 4160 4039 3.922 3.812 37063605 3.508 3.416 3.327 3.242 316 8 6733 6.463 6210 5971 5747 5535 5335 5146 4968 4799 4639 4487 4 344 4207 4078 3.954 3.837 3.726 3.619 3.518 3.421 3.32 9 7435 7108 6802 6515 6 247 5995 5759 5537 5328 5132 4946 4772 4607 4451 4303 4163 4031 3.905 3786 3.673 3566 3.48 10 8.111 7722 7360 7024 6710 6.418 6145 5.889 5650 5426 5 216 5.019 4833 4659 4494 43394192 4054 3923 3799 3682 357 11 8.760 8 306 7887 7499 7139 6.805 6.495 6 207 5.938 5687 5453 5234 5029 4836 4656 4486 4327 4177 4035 3.902 3776 3.65 12 9.385 8863 8384 7943 7536 7161 6.814 6.492 6.194 5.918 5.660 5.421 5197 4988 4793 4611 4.439 4278 4127 3.985 3.851 372 13 9.986 9.394 8.853 8358 7904 7487 7103 6.750 6.424 6122 5.842 5583 5.342 5.118 4910 4715 4533 4362 4203 4053 3.912 378 14 10.563 9.899 9.295 8745 8 244 7786 7367 6.982 6.628 6.302 6.002 5724 5 468 5229 5008 4802 4611 4432 4265 4108 3.962 3.82 15 11118 10 380 9712 9108 8.559 8.061 7606 7191 6.811 6.462 6142 58475575 5324 5.092 4.876 4675 4489 43154153 4001 3.89 16 11652 10.838 10.106 9447 8851 8.313 7824 7379 6.974 6604 6265 5.954 5668 5.405 5162 4938 4730 4536 4357 41894033 3.88 17 12.166 11274 10477 9.763 9122 8544 8022 7549 7120 6729 6373 6047 5749 5.475 5222 4990 4775 4576 4391 4219 4059 391 18 12 659 11690 10 828 10 059 9 372 8756 8201 7702 7250 6840 6 467 6128 5818 5534 5273 5033 48124608 4.419 4243 4080 3.97 19 13.134 12085 11.158 10.336 9.604 8.950 8365 78397366 6.938 6.550 6.198 5.877 5.584 5316 5.070 4.843 4635 4.442 4263 4097 3.94 20 13.590 12.462 11470 10.594 9.818 9.129 8514 7963 7469 7025 6623 6.259 5.929 5628 5353 5101 4870 4657 4.460 4.279 4.110 3.99 21 14.029 12821 11764 10.836 10.017 9.292 8649 8075 7562 71026.687 6.3125.9735.665 5384 5127 4891 4675 4.476 4.292 4121 3.99 22 14.451 13.163 12.042 11.061 10201 9.442 87728.176 76457170 6743 6.359 6.0115696 5.410 5149 4909 4690 4488 4302 4130 3.97 23 14.857 13.489 12 303 11272 10371 9.580 8883 8266 7718 7230 6792 6.399 6 044 5723 5.432 5167 4925 4703 4.499 4311 4137 3.97 24 15 247 13.799 12.550 11.469 10.529 9707 8 985 8348 7784 7283 6835 6.434 6.073 5746 5.451 5182 4937 4713 4507 4318 4143 3.98 25 15 622 14.094 12783 11654 106759 823 9077 8.422 78437330 6873 6 464 6097 5766 5467 5195 4948 4721 4514 4323 4147 26 15.983 14.375 13.003 11826 10.810 9.929 9161 8488 7896 7372 6.906 6.491 6.118 5783 5 480 5206 4956 4728 4520 4328 4151 3.98 27 16.330 14.643 13.211 11987 10.935 10.027 9.237 8.548 7943 7409 6.935 6.514 6136 5798 5.492 5 215 4.964 4734 4524 4.332 4154 3.99 28 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7984 7441 6.961 6.534 6.152 5.810 5.502 5 223 4.970 4.739 4528 4.335 4.157 3.99 29 16.984 15.141 13.591 12.278 11158 10.198 9.370 8.650 8.022 7470 6.983 6.551 6.166 5.820 5.510 5229 4.975 47434531 4.337 4159 3.99 30 17.292 15372 13.765 12.409 11 258 10 274 9.427 8694 8.055 7496 7003 6.566 6.177 5.829 5.517 5235 4.979 4746 4534 4339 4160 3.99 40 19793 17159 15.046 13.332 11.925 10.757 9779 8.951 8.244 7634 7105 6.642 6 233 5.871 5548 5258 4.997 4760 4544 4347 4166 3.99 398