Ritter Razors is considering an equipment investment that will cost $950,000. Projected net cash inflows over the equipment's three-year life are as follows: Year 1: $486,000; Year 2: $382,000; and Year 3: $292,000. Ritter wants to know the equipment's IRR. (Click the icon to view the present value annuity table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value factor table.) Requirement Use trial and error to find the IRR within a 2% range. (Hint: Use Ritter's hurdle rate of 8% to begin the trial-and-error process.) Use a business calculator or spreadsheet to compute the exact IRR. Begin by calculating the NPV at three rates: 8%, 10%, and 12%. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV at 8% is $ 59,258 The NPV at 10% is $ 26,598 The NPV at 12% is $ (3,644) The IRR is somewhere between 10% and 12% , but closer to 12%. (Round your answer to two decimal places.) The exact IRR using a business calculator or spreadsheet is Enter any number in the edit fields and then click Check Answer. Check Answer Present Value of Annuity of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 1.970 2.941 3.902 4.853 2% 3% 4% 5% 6% 0.980 0.971 0.962 0.952 0.943 1.942 1.913 1.886 1.859 1.833 2.884 2.8292.775 2.723 2.673 3.808 3.717 3.630 3.546 3.465 4.713 4.580 4.452 4.329 4.212 8% 10% 12% 0.926 0.909 0.893 1.783 1.736 1.690 2.577 2.487 2.402 3.312 3.170 3037 3.993 3.791 3.605 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 Period 10 9.471 5.601 5.417 5.242 5.076 4.917 6.472 6.230 6.002 5.786 5.582 7.325 7020 6.733 6.463 6.210 8.162 7.786 7.435 7.108 6.802 8.983 8.530 8.111 7.722 7.360 4.623 4.355 4.111 5.206 4.868 4.564 5.747 5.335 4.968 6.247 5.759 5.328 6.710 6.145 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 Period 12 11.255 10.575 | 9.954 9.385 8.863 8.384 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 7.139 6.495 5.938 7.536 6.814 6.194 7 904 7.103 6.424 8.244 7.367 6.628 8.559 7.606 6.811 5.453 5.660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 Period 20 18.046 16.351 14.877 13 590 12.462 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 Present Value of $1 14% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 4% 0.971 0.962 0.943 0.925 0.915 0.889 0.888 0.855 0.863 0.822 15% 6% 8% 0.952 0.943 0.926 0.907 0.890 0.857 0.864 0.840 0.794 0.823 0.792 0.735 0.784 0.747 0.681 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 | 0.705 0.711 0.665 0.677 0.627 0.645 0.592 0.614 0.558 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 Period 11 0.896 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.527 0.557 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 Future Value of Annuity of $1 Periods Period 1 Period 2 Period 3 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5368 7.442 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 6.152 6.308 6.468 6.633 7.214 7.434 7.662 7 898 8.286 8.583 8.892 9.214 9.369 9.755 10.159 10.583 10.462 10.950 11.464 12.006 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 8.115 9.487 10.089 11.436 12.300 13.579 14.776 15.937 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14 240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20 799 25.959 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12. 169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 14.947 15 974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 16.097 17.293 18 599 20.024 21.579 23.276 27.152 31.772 37 280 23.045 27 271 32.089 37 581 43.842 25.733 30.850 36.786 43.672 51.660 28.755 34.931 42.219 50 818 60.965 32.150 39.581 48.497 59.196 72.035 Period 20 22019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 Future Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1020 1040 1061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1 346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2074 2.488 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 Period 11 Period 12 Period 13 Period 14 Period 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1319 1346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 1.898 2.012 2.133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 Period 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 Ritter Razors is considering an equipment investment that will cost $950,000. Projected net cash inflows over the equipment's three-year life are as follows: Year 1: $486,000; Year 2: $382,000; and Year 3: $292,000. Ritter wants to know the equipment's IRR. (Click the icon to view the present value annuity table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value factor table.) Requirement Use trial and error to find the IRR within a 2% range. (Hint: Use Ritter's hurdle rate of 8% to begin the trial-and-error process.) Use a business calculator or spreadsheet to compute the exact IRR. Begin by calculating the NPV at three rates: 8%, 10%, and 12%. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV at 8% is $ 59,258 The NPV at 10% is $ 26,598 The NPV at 12% is $ (3,644) The IRR is somewhere between 10% and 12% , but closer to 12%. (Round your answer to two decimal places.) The exact IRR using a business calculator or spreadsheet is Enter any number in the edit fields and then click Check Answer. Check Answer Present Value of Annuity of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 1.970 2.941 3.902 4.853 2% 3% 4% 5% 6% 0.980 0.971 0.962 0.952 0.943 1.942 1.913 1.886 1.859 1.833 2.884 2.8292.775 2.723 2.673 3.808 3.717 3.630 3.546 3.465 4.713 4.580 4.452 4.329 4.212 8% 10% 12% 0.926 0.909 0.893 1.783 1.736 1.690 2.577 2.487 2.402 3.312 3.170 3037 3.993 3.791 3.605 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 Period 10 9.471 5.601 5.417 5.242 5.076 4.917 6.472 6.230 6.002 5.786 5.582 7.325 7020 6.733 6.463 6.210 8.162 7.786 7.435 7.108 6.802 8.983 8.530 8.111 7.722 7.360 4.623 4.355 4.111 5.206 4.868 4.564 5.747 5.335 4.968 6.247 5.759 5.328 6.710 6.145 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 Period 12 11.255 10.575 | 9.954 9.385 8.863 8.384 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 7.139 6.495 5.938 7.536 6.814 6.194 7 904 7.103 6.424 8.244 7.367 6.628 8.559 7.606 6.811 5.453 5.660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 Period 20 18.046 16.351 14.877 13 590 12.462 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 Present Value of $1 14% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 4% 0.971 0.962 0.943 0.925 0.915 0.889 0.888 0.855 0.863 0.822 15% 6% 8% 0.952 0.943 0.926 0.907 0.890 0.857 0.864 0.840 0.794 0.823 0.792 0.735 0.784 0.747 0.681 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 | 0.705 0.711 0.665 0.677 0.627 0.645 0.592 0.614 0.558 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 Period 11 0.896 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.527 0.557 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 Future Value of Annuity of $1 Periods Period 1 Period 2 Period 3 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5368 7.442 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 6.152 6.308 6.468 6.633 7.214 7.434 7.662 7 898 8.286 8.583 8.892 9.214 9.369 9.755 10.159 10.583 10.462 10.950 11.464 12.006 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 8.115 9.487 10.089 11.436 12.300 13.579 14.776 15.937 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14 240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20 799 25.959 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12. 169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 14.947 15 974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 16.097 17.293 18 599 20.024 21.579 23.276 27.152 31.772 37 280 23.045 27 271 32.089 37 581 43.842 25.733 30.850 36.786 43.672 51.660 28.755 34.931 42.219 50 818 60.965 32.150 39.581 48.497 59.196 72.035 Period 20 22019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 Future Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1020 1040 1061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1 346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2074 2.488 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 Period 11 Period 12 Period 13 Period 14 Period 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1319 1346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 1.898 2.012 2.133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 Period 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338