Samson Industries could refurbish the equipment at the end of six years for $ 100,000. The refurbished equipment could be used one more year, providing $75, 000

of net cash inflows in Year 7. In addition, the refurbished equipment would have a $53,000 residual value at the end of Year 7. Should Samson Industries invest in the equipment and refurbish it after six years? Why or why not?

Present Value of $1
Periods	1%	2%	3%	4%	5%	6%	8%	10%	12%	14%	16%	18%	20%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.926	0.909	0.893	0.877	0.862	0.847	0.833
2	0.980	0.961	0.943	0.925	0.907	0.890	0.857	0.826	0.797	0.769	0.743	0.718	0.694
3	0.971	0.942	0.915	0.889	0.864	0.840	0.794	0.751	0.712	0.675	0.641	0.609	0.579
4	0.961	0.924	0.888	0.855	0.823	0.792	0.735	0.683	0.636	0.592	0.552	0.516	0.482
5	0.951	0.906	0.863	0.822	0.784	0.747	0.681	0.621	0.567	0.519	0.476	0.437	0.402
6	0.942	0.888	0.837	0.790	0.746	0.705	0.630	0.564	0.507	0.456	0.410	0.370	0.335
7	0.933	0.871	0.813	0.760	0.711	0.665	0.583	0.513	0.452	0.400	0.354	0.314	0.279
8	0.923	0.853	0.789	0.731	0.677	0.627	0.540	0.467	0.404	0.351	0.305	0.266	0.233
9	0.914	0.837	0.766	0.703	0.645	0.592	0.500	0.424	0.361	0.308	0.263	0.225	0.194
10	0.905	0.820	0.744	0.676	0.614	0.558	0.463	0.386	0.322	0.270	0.227	0.191	0.162
11	0.896	0.804	0.722	0.650	0.585	0.527	0.429	0.350	0.287	0.237	0.195	0.162	0.135
12	0.887	0.788	0.701	0.625	0.557	0.497	0.397	0.319	0.257	0.208	0.168	0.137	0.112
13	0.879	0.773	0.681	0.601	0.530	0.469	0.368	0.290	0.229	0.182	0.145	0.116	0.093
14	0.870	0.758	0.661	0.577	0.505	0.442	0.340	0.263	0.205	0.160	0.125	0.099	0.078
15	0.861	0.743	0.642	0.555	0.481	0.417	0.315	0.239	0.183	0.140	0.108	0.084	0.065
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
25	0.780	0.610	0.478	0.375	0.295	0.233	0.146	0.092	0.059	0.038	0.024	0.016	0.010
30	0.742	0.552	0.412	0.308	0.231	0.174	0.099	0.057	0.033	0.020	0.012	0.007	0.004
40	0.672	0.453	0.307	0.208	0.142	0.097	0.046	0.022	0.011	0.005	0.003	0.001	0.001

Samson Industries is deciding whether to automate one phase of its production process. The manufacturing equipmert has a six-year lfe a (cack the icon to view the projected net cash inflows (Click the icon to view the present value annuity table) (click the icon to wew the present value table.) E (Click the icon to view the future value annuity tabie) e (cick the icon to view the future value table.) Requirements NPv using Samson Industries' 14% Should the company invest in the equipment? Why or why no 1. compute this project's hurdle rate. could be used one 2. Samson Industries refurbish the equipment at the end of six years for s100,000. The refurbished equipment in the equipment a refurbished could residual value at the end of Year 7. Should Industries equipment would have a $53,000 back to present value.) and inflows the answer to Requirement discount the additional cash out wriore uomar use parenumeses ur a muus s oegmuy cumppuung une proyec preseru value). Uhruuna your er ure mearesu s IVrv (neu (31,621) Net present value Samson industries should not invest in the equipment because its NPv is negative Requirement 2. Samson Industries could refurbish the equipment at the end of six years for $100,000. The refurbished equipment coul addition, the refurbished equipment would have a $53,000 residual value at the end of Year 7. Should Samson Industries invest in the ec your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value) calculate the additional NPV provided from the refurbishment (Round your answer to the nearest whole dollar Use parentheses or a m Additional NPV provided from refurbishment s Enter any number in the edit fields and then click Check Answer Clear All 1 parti