Save HW Score: 0%, 0 of 90 pts Question Help Homework: ACC-260 Topic 6 Practice Problems Score: 0 of 1 pt 58 of 90 (0 complete) E26-24 (book/static) Holmes Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $910,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Data Table Read the requirements. S Year 1 Year 2 2 262,000 254,000 222,000 Year 3 Year 4 Year 5 Year 6 215,000 200,000 175,000 Requirement 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Holmes 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 neg Net Cash PV Factor (i Years Inflow 14%) Present Value Year 1 Present value of each year's inflow: (n = 1) Year 2 Present value of each year's inflow: (n=2) Year 3 Present value of each year's inflow: (n = 3) Year 4 Present value of each year's inflow: (n = 4) Year 5 Present value of each year's Inflow: (n = 5) Year 6 Present value of each year's Inflow: (n = 6) : (= i Requirements Total PV of cash inflows Year Initial investment Net present value of the project 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Holmes invest in the equipment? 2. Holmes could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $77,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7. Should Holmes invest in the equipment and refurbish it after six years? (Hint: In addition to your Enter any number in the edit fields and then click Check Answer. answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done ? 3 parts Check Answer remaining Print Done