Save Homework: Homework 9 Chapter 26 Score: 0 of 4 pts 3 of 3 (1 complete) E26-24 (similar to) HW Score: 30%, 3 of 10 pts Question Help Swan Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $920,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) 2 (Click the icon to view Present Value of $1 table.) 3 (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Requirement 1. Compute this project's NPV using Swan's 16% hurdle rate. Should Swan invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Enter any number in the edit fields and then click Check Answer. i Data Table Year 1 $ Year 2 Year 3 261,000 253,000 226,000 214,000 204,000 175,000 Year 4 Year 5 Year 6 Print Done A Requirements 1. Compute this project's NPV using Swan's 16% hurdle rate. Should Swan invest in the equipment? 2. Swan could refurbish the equipment at the end of six years for $100,000. The refurbished equipment could be used one more year, providing $76,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $50,000 residual value at the end of year 7. Should Swan invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done Net Cash Inflow PV Factor (i = 16%) Present Value Years Present value of each year's inflow: 1 In - 1 1 2 Present value of each year's inflow: (n = 1) (n=2) 3 4 5 (n = 3) (n = 4) (n = 5) co Total PV of cash inflows Initial investment Net present value of the project y number in the edit fields and then click Check