Robust Tire Company needs to overhaul its auto lift system or purchase a new one. The facts have been gathered, and they are as follows: (Click the icon to view the facts.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Which alternative is the most desirable with a current required rate of return of 20%? Show computations, and assume no taxes. Begin by selecting the formula to calculate the present value (PV) for the annual operating costs. Then, calculate the PV of the operating costs for both the current machine and the new machine. (Use factors to three decimal places, X.XXX, and round all currency calculations to the nearest whole dollar. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) PV of cash = operating costs Current machine New machine Select the formula to calculate the present value (PV) for the salvage value at the end of 10 years. Then, calculate the PV of the salvage value at the end of 10 years for both the current machine and the new machine. (Use factors to three decimal places, X.XXX, and round all currency calculations to the nearest whole dollar. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) PV of salvage value Current machine New machine Using the table below, calculate the net present value (NPV) of overhauling the current auto lift system and the net present value of investing in a new auto lift system. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) NPV of Cash Flows Overhaul existing system Invest in new system Net present value Which alternative is the most desirable with a current required rate of return of 20%? is the better option, as it results in cost savings of Robust Tire Company needs to overhaul its auto lift system or purchase a new one. The facts have been gathered, and they are as follows: (Click the icon to view the facts.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Which alternative is the most desirable with a current required rate of return of 20%? Show computations, and assume no taxes. Begin by selecting the formula to calculate the present value (PV) for the annual operating costs. Then, calculate the PV of the operating costs for both the current machine and the new machine. (Use factors to three decimal places, X.XXX, and round all currency calculations to the nearest whole dollar. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) PV of cash = operating costs Current machine New machine Select the formula to calculate the present value (PV) for the salvage value at the end of 10 years. Then, calculate the PV of the salvage value at the end of 10 years for both the current machine and the new machine. (Use factors to three decimal places, X.XXX, and round all currency calculations to the nearest whole dollar. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) PV of salvage value Current machine New machine Using the table below, calculate the net present value (NPV) of overhauling the current auto lift system and the net present value of investing in a new auto lift system. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Use a minus sign or parentheses to show cash outflow (costs) and for a negative net present value.) NPV of Cash Flows Overhaul existing system Invest in new system Net present value Which alternative is the most desirable with a current required rate of return of 20%? is the better option, as it results in cost savings of
