33 Moates Corporation has provided the following data concerning an investment project that it is considering: 10 points Initial investment Annual cash flow Expected life of the project Discount rate $270,000 $125,000 per year 4 years 10% 33 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. 10 points The net present value of the project is closest to: Multiple Choice (0) $126,125 $270,000 $(145,000) $(126,125) EXHIBIT 120-1 Present Value of St: 11% 16% Periods 4% 5% 6% 7% 8% 9% 10% 12% 13% 15% 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 0873 0857 0.842 0.826 0.812 0797 0.783 0.769 0.756 0743 0731 0.718 0.706 0.694 0.683 0672 0661 0650 0.640 3 0889 0864 0840 0.816 0794 0772 0751 0731 07120693 0675 0658 0641 0624 0609 0.593 0579 0.564 0551 0537 0.524 0512 4 0.855 0823 0792 0763 0735 0.708 0.683 0659 0636 0613 0.592 0.572 0.552 0.534 0.516 0499 0482 0.467 0.451 0.437 0.423 0410 5 0.822 0784 0.747 0.713 0.681 0.650 0621 0.593 0.567 0.543 0.519 0.497 0.476 0456 0437 0.419 0402 0.386 0.370 0.355 0.341 0.328 6 0.790 0.746 0705 0.666 0630 0.596 0.564 0.535 0.507 0.480 0.456 0432 0410 0.390 0.370 0.352 0335 0.319 0.303 0289 0.275 0.262 7 0.760 0.711 0665 0623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0296 0279 0.263 0.249 0235 0222 0210 8 0731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0376 0.351 0327 0.305 0285 0266 0249 0233 0.218 0204 0.191 01790168 9 0703 0645 0.592 0544 0500 0.460 0424 0.391 0361 0333 0.308 0284 0263 0243 0225 0209 0194 01800167 0155 0144 0134 10 0.676 0614 0.558 0.508 0463 0422 0386 0.352 0.322 0295 0270 0247 0227 0208 0191 0176 01620149 01370126 0.116 0107 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0287 0 261 0237 0215 0.195 0.178 0162 0.148 0135 0.123 01120103 0.094 0.086 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0286 0257 0231 0208 0187 0168 0152 0137 0124 01120102 0.092 0.083 0.076 0.069 13 0 601 0.530 0.469 0.415 0.368 0326 0290 0258 0229 0204 0182 0163 015 0130 0.116 0104 0093 0.084 0.075 0.068 0.061 0.055 14 0.577 0.505 0.442 0388 0340 0.299 0.263 0232 0205 0181 0160 0141 0.125 0.111 0.099 0.088 0078 0.069 0.062 0055 0049 0.044 15 0.555 0.481 0.417 0.362 0.315 0275 0239 0209 0183 0160 0140 0123 0108 0.095 0.084 0.074 0065 0.057 0.051 0.045 0.040 0.035 16 0.534 0.458 0.394 0339 0292 0252 0218 0188 0163 01410123 0107 0.093 0.081 00710062 0.054 0.047 0.042 0.036 0032 0028 17 0.513 0.436 0.371 0317 0270 0231 0.198 01700146 01250108 0.093 0.080 0.069 0.060 0,052 0045 0.039 0.034 0030 0.026 0.023 18 0.494 0.4160350 0296 0 250 0212 01800153 0130 0111 0095 0.081 0.069 0059 0.051 0044 0038 0.032 0.028 0.024 0.021 0.018 19 0.475 0.396 0331 0277 0232 0.194 0.164 0138 0116 0.098 0083 0.070 0.060 0.051 0.043 0.037 0031 0.027 0.023 0.020 0017 0.014 20 0.456 0377 0312 0258 02150178 0149 0124 0904 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.01 0.014 0.012 21 0.439 0359 0294 0242 0199 0164 0135 0112 0.093 0.077 0064 0.053 0044 0.037 0.031 0.026 0022 0.018 0.015 0.013 0011 0009 22 0.422 0.342 0278 0226 0184 0150 0123 0101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0022 0.018 0.015 0.013 0011 0.009 0.007 23 0.406 0326 0262 0211 0.170 0138 0.112 0.091 0.074 0.060 0049 0040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0.390 0310 0247 0197 0158 0126 0102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0015 0013 0.010 0.008 0.007 0.006 0.005 25 0.375 0295 0233 0184 0146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.0160.013 0010 0.009 0.007 0.006 0,005 0,004 26 0.361 0281 0220 0172 01350106 0.084 0.066 0.053 0042 0.033 0.026 0.021 0.017 0.014 0011 0009 0.007 0.006 0.005 0.004 0.003 27 0.347 0268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.0110.009 0.007 0.006 0.005 0.004 0.003 0.002 28 0.333 0255 0.196 0150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.00 0.008 0.006 0.005 0.004 0.003 0.002 0.002 29 0.321 0.243 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 0.308 0.231 0.174 0.131 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 0.208 0.142 0.097 0.067 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% 119 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 249 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 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 3 2775 2.723 2.673 2624 2.577 2531 2487 2444 2.402 2.361 2322 2283 2246 2210 2.174 2.140 2106 2074 2.042 2.011 1981 1952 4 3.630 3.546 3.465 3387 3.312 3.240 3.170 3102 3.037 2974 2.914 2.855 2798 2743 2690 2639 2 589 2.540 2494 2.448 2.404 2.362 5 4.452 4329 4212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3127 3.058 2991 2926 2864 2.803 2745 2.689 6 5242 5.076 4917 4767 4623 4.486 4.355 4231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951 7 6 002 5.786 5.582 5389 5.206 5,033 4868 4712 4564 4423 4288 4160 4039 3.922 3812 3.706 3.605 3.508 3.416 3.327 3242 3.161 8 6.733 6.463 6.210 5.971 5747 5.535 5335 5146 4968 4799 4639 4.487 4344 4207 4078 3.954 3.837 3726 3619 3518 3.421 3.329 9 7435 7108 6.802 6.515 6 247 5.995 5759 5537 5328 51324946 4772 4607 4.451 4303 4163 4031 3.905 3786 36733566 3.463 10 8.111 7722 7360 7024 6710 6.418 6145 5.889 5650 5.426 5216 5.019 4833 4659 4.494 4339 4.192 4.054 3.923 3.799 3.682 3.571 11 8.760 8.306 7887 7499 7139 6.805 6495 6 207 5.938 5687 5453 5 234 5.029 4836 4656 4486 4327 4177 4035 3.902 3776 3656 12 9.385 8863 8384 7943 7536 7161 6 814 6.492 6194 5918 5660 5.421 5197 4988 4793 4611 4.439 4278 4127 3.985 3851 3725 13 9.986 9.394 8.853 8.358 7904 7.487 7103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4910 4715 4533 4362 4203 4.053 3.912 3780 14 10.563 9.899 9.295 8745 8 244 7786 7367 6.982 6628 6 302 6.002 5724 5.468 5229 5008 4 802 4611 4432 4265 4108 3.962 3824 15 11.118 10.380 9712 9.108 8.559 8.061 7606 7191 6.811 6.462 6.142 5.847 5.575 5324 5.092 4.876 4675 4.489 4315 4.153 4001 3.859 16 11.652 10.838 10.106 9.447 8851 83137824 7379 6.974 6,604 6.265 5954 5668 5.405 5162 4938 47304536 4357 41894033 3.887 17 12 166 11274 10.477 9763 9122 8.544 802275497120 6729 6.373 6047 5749 5.475 5222 4990 4775 4576 4391 4219 4059 3.910 18 12 659 11690 10828100599372 8756 8201 7702 7250 6 840 6 467 6128 5818 5534 5273 5033 48124608 4 419 4243 4080 3.928 19 13.134 12085 11158 10.336 9604 8950 8365 7839 7366 6.938 6.550 6198 5877 5584 5 316 5.070 4.843 4635 4442 4263 4097 3.942 20 13.590 12.462 11.470 10.594 9818 9129 8.514 7963 7469 7025 6.623 6.259 5.929 5628 5353 5.101 4.870 4657 4.460 4279 4110 3.954 21 14.029 12821 11764 10.836 10.017 9.292 8649 8075 75627102 6.687 6.312 5973 5665 5384 5127 4891 4675 4.476 4292 4121 3.963 22 14.451 13163 12.042 11.061 10 201 9442 8772 81767645 7170 6743 6.359 6.0115696 5.410 5.149 4.909 4690 4488 4302 4130 3.970 23 14.857 13.489 12.303 11272 10.371 9580 8883 8266 7718 7230 6792 6 399 6 044 5723 5.432 5167 4925 4703 4499 4311 4137 3.976 24 15.247 13799 12.550 11469 10.529 97078985 8348 7784 7283 6.835 6.434 6.073 5746 5451 5.182 4937 4713 4507 4318 4143 3.981 25 15 622 14094 12783 11654 10675 9823 907784227843 7330 6873 64646097 5766 5467 51954948 4721 4514 4323 4147 3985 26 15.983 14375 13.003 11826 10810 9.929 9161 8.488 7896 7372 6906 6.491 6118 5783 5.480 5 206 4956 4728 4520 4328 4151 3.988 27 16.330 14643 13.211 11987 90 935 10.027 9.237 8.548 7943 7409 6.935 6.514 6136 5798 5.492 5215 4964 4734 4524 4332 4154 3.990 28 16.663 14898 13.406 12137 11051 10116 9.307 8.602 7984 7441 6961 6,534 6152 5810 5502 5223 4970 47394528 4335 4157 3.992 29 16.984 15141 13.591 12.278 1115810198 9.370 8650 8.022 7470 6.983 6551 6166 5.820 5510 5229 4975 4743 4531 4337 4159 3.994 30 17.292 15 372 13.765 12 409 11 258 10.274 9 427 8694 8055 7496 7003 6.566 61775829 5517 5235 4979 4746 4534 4339 4160 3.995 40 19.793 17159 15.046 13.332 11925 10757 9779 8951 8 244 7634 7105 6642 6233 58715548 5258 4997 4760 4544 4347 4166 3.999 34 10 points The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $18,000, would be replaced by a new machine. The new machine would be purchased for $456,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $157,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) 34 Multiple Choice 10 points O 18.5% 17.8% O 34.4% O 16.7%
