3 Joanette, Inc., is considering the purchase of a machine that would cost $570,000 and would last for 9 years, at the end of which, the machine would have a salvage value of $57,000. The machine would reduce labor and other costs by $117,000 per year. Additional working capital of $3,000 would be needed immediately, all of which would be recovered at the end of 9 years. The company requires a minimum pretax return of 18% on all investment projects. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2 to determine the appropriate discount factor(s) using the tables provided. Required: Determine the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) Net present value EXHIBIT 128-1 Present Value of $1: (+ 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 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 0.706 0694 0683 0672 0661 0.650 0.640 3 0.889 0.864 0.840 0816 0794 072 0751 0731 07120693 0675 0658 0641 0624 0609 0593 0579 0564 0551 0537 0.524 0512 4 0855 0823 0.792 0763 0735 0708 0.683 0659 0636 0613 0.592 0572 0.552 0534 0.516 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 0.567 0543 0.519 0.497 0.476 0.456 0.437 0.419 0402 0.386 03700355 0.341 0.328 6 0.790 0.746 0.705 0.666 0630 0.596 0.564 0.535 0.507 0.480 0.456 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 0.376 0.354 0.333 0.314 0 296 0.279 0.263 0249 0235 0.222 0.210 8 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0376 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 0.500 0.460 0424 0.391 0361 0333 0308 0.284 0263 0243 0.225 0209 0.194 0.1800167 0.155 0.144 0134 10 0.676 0614 0.558 0508 0463 0.422 0.386 0.352 0.322 0295 0.270 0247 0227 0208 0191 0176 01620149 01370126 0.116 0107 11 0650 0.585 0.527 0.475 0429 0.388 0.350 0.317 0287 0261 0237 02150195 0178 0.162 0148 0.135 0123 01120103 0.094 0.086 12 0625 0.557 0497 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 0093 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 0232 0205 0.181 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 0140 01230108 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 0292 0252 0.218 0.188 0163 0141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 17 0.513 0436 0.371 0.317 0.270 0231 0.198 01700146 0125 0108 0093 0.080 0.069 0.060 0,052 0.045 0.039 0034 0.030 0.026 0023 18 0.494 0.416 0.350 0296 0.250 0212 01800153 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 0138 0116 0.098 0083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0023 0.020 0.017 0.014 20 0.456 0377 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 0.01 0.014 0.012 21 0.439 0.359 0.294 0.2420199 0164 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 0.226 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 0170 0138 0.112 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 0.126 0102 0082 0.066 0.053 0043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0005 25 0.375 0.295 0.233 0.1840146 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 0084 0066 0053 0042 0033 0026 0.021 0.017 0014 0011 0009 0.007 0.006 0.005 0.004 0.003 27 0347 0.268 0207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.01 0.009 0.007 0.006 0.005 0.004 0.003 0.002 28 0.333 0255 0.196 0.150 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 0.308 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 128-2 Present Value of an Annuity of $1 in Arrears: Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25 1 0.962 0.952 0.943 0.935 0926 0.917 0.909 0.901 0.893 0885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0806 080 2 1.886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 16051585 1566 1547 1528 1509 1.492 1.474 1457 144 3 2.775 2.723 2673 2624 2.577 2531 2487 2444 2.402 2361 2322 2.283 2.246 2210 2174 2140 2106 2.074 2.042 2011 1981 195 4 3.630 3.546 3.465 3387 3.312 32403170 3102 3.037 2974 2914 2.855 2798 2743 2690 2639 2589 2540 2494 2448 2404 2.36 5 4.452 4.329 4212 4100 3.993 3.890 3.791 3.696 3.605 3517 3.433 3.352 3274 3199 3127 3.058 2991 2926 2864 2803 2745 268 6 5.242 5.076 4917 4767 4623 4.486 4355 4231 4111 3.998 3.889 3784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.99 7 6.002 5786 558253895206 5033 4868 4712 4564 4423 4288 4160 4039 3.922 3812 37063605 3.508 3.416 3.327 3.242 316 8 6733 6.463 6210 5971 5747 5.535 5335 5146 4968 4799 4639 4487 4344 4207 4078 3.954 3.837 3.726 3.619 3.518 3.421 332 9 7435 7108 6.802 6515 6 247 5995 5759 5537 5328 5132 4946 4772 4607 4451 4303 4163 4031 3.905 3786 3673 3566 3.48 10 8.111 7722 7360 7024 6710 6.418 6145 5.889 5650 5.426 5216 5.019 4833 4659 4494 4339 4192 4054 3.923 3799 3682 3.57 11 8760 8306 7887 7499 7139 6 805 6.495 6 207 5.938 5687 5453 5234 5029 48364656 4486 4327 4177 4035 3.902 3776 3.65 12 9.385 8.863 8384 7943 7536 7161 6.814 6.492 6.1945.918 5660 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 5342 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 5468 5229 5008 4802 4611 4432 4265 4108 3962 387 15 11118 10 380 9712 9108 8559 8061 7606 7191 6811 6462 6142 5847 5575 5 324 5.092 4876 4675 4.489 4 315 4153 4001 389 16 11652 10.838 10.106 9447 8851 8.313 7824 7379 6974 6,604 6.265 5954 5668 5.405 5162 4938 4730 4536 4357 4189 4033 3.88 17 12 166 11 274 10477 9763 9122 8.544 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 93728756 8201 7702 7250 6840 6 467 6128 5818 5534 5273 5033 48124608 4419 4243 4080 392 19 13.134 12.085 11158 10.336 9.604 8.950 8365 7839 7366 6.938 6.550 6.198 5.877 5.584 5 316 5.070 4.843 4635 4.442 4.263 4097 3.94 20 13.590 12.462 11.470 10.594 9818 9.129 8514 7963 7469 7025 6.623 6.259 5.929 5628 5353 5101 4870 4657 4460 4.279 4110 3.99 21 14.029 12.821 11764 10.836 10.017 9.292 8649 8075 7562 7102 6687 6.312 5.973 5665 5.384 5127 4891 4675 4.476 4292 4121 3.98 22 14.451 13.163 12.042 11061 10.2019.442 87728.176 76457170 6743 6.359 6 011 5696 5.410 5149 4.909 4690 4.488 4.302 4130 3.97 23 14.857 13.489 12 303 11272 10371 9.580 8883 8266 7718 7230 6792 6.399 6,044 57235432 5167 4925 4703 4499 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 15622 14.094 12783 11654 10675 9823 9077 842278437330 6873 6464 6097 5766 5.467 5195 4948 4721 4514 4323 4147 398 26 15.983 14.375 13.003 11826 10.810 9.929 9.161 8.488 7896 7372 6.906 6.491 6.118 5783 5 480 5206 4956 4728 4520 4328 4151 3.99 27 16.330 14.643 13.211 11987 10.935 10.027 9.237 8.548 7943 7409 6.935 6.514 6.136 5.798 5.492 5 215 4.964 4.734 4524 4.332 4.154 3.99 28 16.663 14.898 13.406 12137 11051 10.116 9.307 8.602 7984 7441 6.961 6.534 6.152 5.810 5.502 5 223 4.970 4.739 4.528 4.335 4.157 3.99 29 16.984 15.141 13.591 12.278 11158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6166 5.820 5.510 5229 4.975 4743 4531 4.337 4159 3.99 30 17.292 15.372 13.765 12.409 11 258 10 274 9.427 8694 8.055 7496 7003 6.566 6.177 5.829 5517 5235 4.979 4746 4534 4339 4160 3.99 40 19.793 17159 15.046 13.332 11.925 10.757 9779 8.951 8.244 7634 7105 6.642 6233 5.871 5.548 5258 4.997 4760 4544 4.347 4166 3.99 4 The management of Nixon Corporation is investigating purchasing equipment that would cost $532,000 and have a 7 year life with no salvage value. The equipment would allow an expansion of capacity that would increase sales revenues by $371,000 per year and cash operating expenses by $214,500 per year. (Ignore income taxes.) Required: Determine the simple rate of return on the investment. (Round your answer to 1 decimal place.) Simple rate of return %
