Required information [The following information applies to the questions displayed below.] Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 6% return from its investments. Initial investment Expected net cash flows in: Year 1 Year 21 Year 3 Investment Al $(260,000) 155,000 122,000 107,000 Assume that instead of a zero salvage value, as shown above, the investment has a salvage value of $31,500. Compute the investment's net present value. (PV of $1. EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 at 6% Present Value Year 1 $ 155,000 0.9434 Year 2 122,000 0.8900 Year 3 277,000 0.8396 Totals $ 554,000 $ 0 Amount invested Net present value $ TABLE B.1 Present Value of 1 Rate p=1/(1+iy Periods 1% 2% 2% 4% 5% 6% 4 7% 8% 9% 10% 12% 15% 1 0.9901 0.9804 0.9709 0.9615 2 0.9803 0.9612 0.9246 0.9426 0.9524 0.9434 0.9070 0.8900 0.8734 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 0.8573 0.8417 0.7972 0.8264 0.7561 3 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.7118 0.6575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 5 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 6 0.9420 0.8880 08375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 7 09327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.51321 0.4523 0.3759 8 0.9235 0.8535 0.7894 0.7307 0.6768 06274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 9 0.9143 0.8368 0.7664 0.7026 0.6445 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 0.1869 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 15 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 16 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 03387 0.2919 0.2519 0.2176 0.1631 0.1069 17 0.8444 0.7142 0.6050 0.5134 18 0.8360 0.7002 0.5874 0.4936 0.4155 0.4363 0.3714 0.3503 0.3166 0.2959 0.2703 0.2311 0.1978 0.1456 0.0929 0.2502 0.2120 0.1799 0.1300 0.0808 19 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 20 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 30 35 40 0.7419 0.5521 0.7059 0.5000 0.3554 0.2534 0.6717 0.4529 0.3066 0.2083 0.4120 0.3083 0.2314 0.1741 0.1314 0.1813 0.1301 0.0937 0.1420 0.0972 0.0668 0.0318 0.1460 0.1160 0.0923 0.0588 0.0994 0.0754 0.0676 0.0490 0.0356 0.0460 0.0304 0.0573 0.0334 0.0151 0.0189 0.0075 0.0221 00107 0.0037 Used to compute the present value of a known fum amount. For example: How much would you need to invest today at 10% ompounded emily to accum 55000 in 6 yo omla? Uhing the far of 12 anti-5% (12 seminal periods and a semiannual re of 5%), the factor is 0.55% You would need to invest $2,754 sale (500 x 0.556) TABLE B.2 Future Value of 1 S=(1+i) Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% O 1.0000 1 1.0100 2 1.0201 1.0404 1.0609 1.0816 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0800 1.0700 1.0400 1.0500 1.0600 1.0200 1.0300 1.1664 1.1236 1.1449 1.1025 1.0000 1.0000 1.0000 1.0900 1.1000 1.2100 1.1881 1.1200 1.1500 1.2544 1.3225 3 1.0303 1.0612 1.0927) 1.1249 1.1576 1.1910 1.2250 1.2597 1.2950 1.3310 1.4049 1.5209 4 1.0406 1.0824 1.1255 1.1699 1.2155 1.2625 1.3108 1.3605 1.4116 1.4641 1.5735 1.7490 5 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4026 1.4693 1.5386 1.6105 1.7623 20114 6 1.0615 1.1262 1.1941 1.2653 1.3401 1.4185 1.5007 1.5869 1.6771 1.7716 1.9738 2.3131 7 1.0721 1.1487 1.2299 1.3159 1.4071 1.6058 1.5036 1.7138 1.8280 1.9487 2.2107 2.6600 8 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 1.7182 9 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.8509 2.1719 1.9990 1.9926 2.1436 2.4760 3.0590 2.3579 2.7731 3.5179 10 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908- 1.9672 2.1589 2.3674 2.5937 3.1058 4.0456 11 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 2.3316 2.5804 2.8531 3.4785 4.6524 12 1.1268 1.2682 1.4258 1.7959 1.6010 20122 2.2522 2.5182 2.8127 3.1384 3.8960 5.3503 13 1.1381 1.2936 1.468 1.6651 1.8856 2.1329 2.4098 2.7196 3.0658 3.4523 4.3635 6.1528 14 1.1495 1.3195 1.5126 1.7317 1.9799 2.2609 2.5785 2.9372 3.3417 3.7975 4.8871 7.0757 15 1.1610 1.3459 1.5580 1.8009 2.0789 2.3966 2.7590 3.1722 3.6425 4.1772 5.4736 8.1371 16 1.1726 1.3728 1.6047 1.8730 2.1829 2.5404 2.9522 3.4259 3.9703 4.5950 6.1304 9.3576 17 1.1843 1.4002 1.6528 1.9479 2.2920 2.6928 3.1588 3.7000 4.3276 5.0545 6.8660 10.7613 18 1.1961 1.4282 2.0258 1.7024 2.4066 2.8543 3.3799 3.9960 4.7171 5.5599 7.6900 12.3755 19 1.2081 1.4568 1.7535 2.1068 2.5270 3.0256 3.6165 4.3157 6.1159 5.1417 8.6128 14.2318 20 1.2202 1.4859 1.8061 2.1911 2.6533 3.2071 3.8697 4.6610 5.6044 6.7275 9.6463 16.3665 25 1.2824 1.6406 2.0938 2.6658 4.2919 3.3864 5.4274 6.8485 8.6231 10.8347 17.0001 32.9190 30 13478 1.8114 2.4273 3.2434 4.3219 5.7435 7.6123 10.0627 13.2677 17.4494 29.9599 66.2118 35 1.4166 40 1.4889 1.9999 2.8139 2.2080 3.2620 3.9461 5.5160 7.6861 10.6766 14.7853 20.4140 28.1024 52.7996 133.1755 4.8010 7.04001 10.2857 14.9745 21.7245 31.4094 45.2593 93.0510 267.8635 Used to compute the future value of a keen present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly or 5 years? Using the factor of 20 and 2% C20 quarterly periods and a quarterly interest rate of 25%), she factor is 1.4859. The accumulated value is $4.457.70 ($3,000 x 14859) p= TABLE 8.3 Present Value of an Annuity of 11 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 09174 0.9091 0.8929 0.8696 2 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.7833 1.8080 1.7591 1.7355 1.6901 1.6257 3 29410 2.8286 2.8839 2.7232 2.7751 2.6730 26243 2.5771 25313 2.4869 2.4018 2.2832 4 3.9020 3.8077 3.7171 3.6299 35460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 5 4.8534 4.7135 A5797 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6048 3.3522 6 5.7955 56014 5.4172 5.2421 50757 4.9173 4.6229 4.7665 4.4859 4.3553 4.1114 3.7845 7 67282 64720 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 8 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.5348 5.7466 5.3349 4.9676 4.4873 9 85660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 10 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 6.7101 7.0236 64177 6.1446 5.6502 5.0188 11 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 5.9377 5.2337 12 11.2551 10.5753 9.9540 9.3851 8.3838 8.8633 7.9427 7.53611 7.1607 6.8137 6.1944 5.4206 13 12.1337 11.3484 10.6350 9.956 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 64235 5.5831 14 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 15 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 80607 7.60611 6.8109 5.8474 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 17 15.5623 14.2919 18 16.3983 19 17.2260 20 18.0456 12.1657 13.1661 14.9920 13.7535 12.6593 14.3238 15.6785 16.3514 14.8775 10.4773 11.2741 9.7632 9.1216 8.5436 80216 7.1196 6.0472 10.8276 11.68961 10.0591 9.3719 8.7556 8.2014 7.2497 6.1200 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 73658 6.1982 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 25 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 30 25.8077 35 29.4086 40 32.8347 27.3555 22.3965 24.9986 21.4872 23.1148 19.6004 17.2920 15.3725 13.7648 12.4090 18.6646 16.3742 14.4982 12.9477 19.7928 17.1591 15.0463 13.3317 11.2578 10.5668 11.6546 10.7574 11.9246 10.2737 9.4269 8.0552 6.5660 9.6442 8.1755 6.6166 6.6418 9.7791 8.2438 Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the pent value of $2.000 per year for 10 years auming an dine rest of 9%7 For (-10-9), the PV factor is 64177. $2,000 per year for 10 years is the equivalent of $12.335 de ($2.000 x 6.4177) f=[(1+"-1]/i TABLE B.4 Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 2345 2 20100 2.0200 20300 2.0400 2.0500 2.0600 1.0000 20700 2.0800 1.0000 1.0000 1.0000 1.0000 2.0900 2.1000 2.1200 2.1500 3.0301 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 32781 3.3100 3.3744 3.4725 4.0604 5.1010 4.1216 5.2040 5.3091 4.1836 4.2465 4.31011 4.3746 4.4399 4.5061 4.6410 4.5731 4.7793 4.9934 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.7424 6 6.1520 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 8.7537 7 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 11.0668 B 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 13.7268 9 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 16.7858 10 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 17.5603 18.5312 20.6546 24.3493 12 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 29.0017 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 34.3519 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16.0969 17.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 16 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35.9497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 19. 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118- 20 22.0190 24.2974 26.8704 29.7781 40.9955 25 28.2432 32.0303 36.4593 30 35 34.7849 40.5681 47.5754 41.6603 49.9945 60.4621 40 48.8864 60.4020 75.4013 33.0660 36.7856 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009 98.3471 56.0849 66.4388 79.0582 94.4608 136.3075 164.4940 241.3327 113.2832 73.6522 138.2369 90.3203 111.4348 172.3168 215.7108 271.0244 431.6635 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926 767.0914 45.7620 51.1601 57.2750 72.0524 102.4436 133.3339 212.7930 434.7451 881.1702 1.779.0903 Used to calculate the future value anal intervire of 8% For of a series of equal payments made at the end of each period. For example: What is the future value of $4,000 per year for 6 years asuming an 68%), the FV factor is 7.3359 $4,000 per year for 6 years accumulates to $29,343.60 (5400) 7.3359)