Solomon Auto Repair, Inc. is evaluating a project to purchase equipment that will not only expand the company's capacity but also Improve the quality of its repair services. The board of directors requires all capital Investments to meet or exceed the minimum requirement of a 10 percent rate of return. However, the board has not clearly defined the rate of return. The president and controller are pondering two different rates of return: unadjusted rate of return and internal rate of return. The equipment, which costs $106.000, has a life expectancy of four years. The Increased net profit per year will be approximately $6,300, and the increased cash inflow per year will be approximately $32,719. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a-1. Determine the unadjusted rate of return (use average investment) to evaluate this project. (Round your percentage answer to 2 decimal places. (l.e. 0.2345 should be entered as 23.45).) a-2. Based on the unadjusted rate of return, should the company invest in the equipment? b-1. What is the approximate Internal rate of return of this project? b-2. Based on the Internal rate of return, should the company invest in the equipment? c. Which method is better for this capital investment decision? % % a-1. Unadjusted rate of return a-2. Should the company invest in the equipment? b-1. Internal rate of return b-2. Should the company invest in the equipment? c. Which method is better for this capital investment decision? TABLE 1 PRESENT VALUE OF $1 11 4% 1 2 3 + 5 6 7 S 9 10 11 12 13 14 15 16 17 18 19 20 0.961538 0924556 0.989996 0.854504 0.821927 0.790315 0.759918 0.730690 0.702587 0.675564 0.619581 0624597 0.600574 0.577475 0.355265 0533903 0.513373 0.393625 0.474642 0.456397 59 6% 79 8% 99 10% 125 145 0.952381 16% 20% 0.943396 0.934579 0.925926 0917431 0909091 0.892557 0.907029 0.877193 0.862069 0.833333 0.889996 0.873439 0.857339 0.8416900826446 0.797194 0.769.465 0.743163 0.694444 0.863338 0.839619 0.816295 0.793532 0.772133 0.751315 0.711750 0674972 0.660655 0.575701 0.522702 0.792093 0.762895 0.735030 0.70S 425 0.683013 0.635519 0.592030 0.352291 0.482253 0.783526 0.747258 0.718936 0.6S0553 0.649931 0.6209210.567427 0.519369 0.476113 0.401878 0.746215 0.701961 0.666342 0630170 0.596267 0.564474 0.506631 0.455587 0 G10412 0.334595 0.710681 0.665057 0.622750 0.583190 0.54703405131580 452349 0399637 0,333530 0279052 0.676839 0.027412 0.5820090540269 0.501566 0166507 0.403833 0.350559 0.305025 0.232565 0.614609 0.591898 0.543934 0.500249 0.460125 0.424095 03360610 0 307SOS 0.262953 0.193507 0.613913 0.358395 0.505349 0.463193 0.422411 0 385543 0.321973 0.269744 0.226634 0 161506 0.584679 0.526788 0.475093 0.425583 0387533 0.350494 0.2874760236617 0.195417 0.134585 0.556837 0.496969 0.444012 0.397114 0.355533 0.315631 0.256675 0.207559 0.163463 0.112157 0.530321 0.468839 0414964 0.367693 0.326179 0.259664 0.229174 0.152069 0.145227 0.093464 0.505065 0.442301 0.337517 0 340461 0.299246 0.2633310 201620 0.159710 0.125195 0077857 0.451017 0.417265 0.362446 0.315242 0.274535 0.239392 0.182696 0.140096 0.107920.064905 0053035 0.458112 0.3936-16 0.333735 0.291590 0.251370 0.217629 0.163122 0.1225920.093011 0035073 0.316574 0.270269 0.145635 04362970 371364 0.231073 0.197345 0.107500 0.000207 006914: 0037561 0.415521 0.350344 0.295561 0.250249 0.311994 0:1795590 130010 0.094561 0031301 0.163505 0.116107 0.231712 0.191190 0.052946 0059607 0.395734 0.330513 0.276505 0.148644 0.1036620072762 0.0513550026054 0.255519 0214515 0.175431 0.376899 0.311505 TABLE 2 PRESENT VALUE OF AN ANNUITY OF 51 2 10% 1 2 3 4 5 6 7 S 9 10 HI 12 13 0.961538 1.586095 2.775091 3.629595 4:451522 3.242137 6.002055 6.732745 7435332 3 110396 8.760472 9.395074 9.985648 10.563123 1113337 11.632296 12 165669 12.659297 13:133939 13 590326 596 0.952381 1.859410 2.723243 3.545951 4.329.077 5075092 3.736373 6.463213 7.107322 7.721735 8.306114 3.363252 9.393573 9.598651 10 379658 10.837770 11 274060 11 659397 12 085321 12 462210 65 0.943396 1.333393 2673012 3.465106 4212364 4917324 5.552331 6 209794 6.301692 7360037 7.556575 3:393344 3.552683 9.294934 9.712219 10.105895 10477260 10.527603 11.153116 11.469921 7 89 96 125 0.934579 145 16% 0925926 20% 0.917431 0909091 0.592557 0.377193 O S62069 1.508018 0.333333 1.733265 1.759111 1.735537 1.090051 1616661 1 605232 2624316 1527775 2.577097 2531295 2.486552 2401831 23216322245590 2.106131 3.387211 3.312127 3.239720 3.169365 3.037349 2913712 2.790181 2558735 4.100197 392710 3.399651 3.790757 3.601776 3433051 32742942990612 4.766540 4622350 4.485919 4355261 4.111107 3.683663 3.634736 3325510 5.389259 3. 206370 5.032953 4863419 4563757 4.253305 4038565 3601502 5.971299 5.746639 5.3348195334926 4907640 4.6333614343591 3.007100 6.515232 6.2.46889 5.995242 5.759024 5329250 4916372 4.00654 4030967 7.023552 6.710081 6.417653 6 144567 5,650333 5216116 4333227 4.192472 7.198674 7:135961 6. SO5191 6.195061 5.937699 5.452733 5.0256144327000 7942636 7536078 7.160725 6.313692 6.194374 5660292 5.197107 4439217 8:357651 7903776 7.480904 7.103356 6.423545 5.342362 51342334 4332651 3745163 3.244237 7.736150 7366687 6.628165 6 002072 5467529 4610567 9.107914 S.559479 9.0606837.6060506310365 6:142105 4675473 3.575450 4.729561 9116619 6265000 5.663107 8.351369.312558 7.5237096973956 43274634 9.763223 9.121636.5436318021553 7119630 6.372559.745 704 7.2.19670 6.167400 5.201412 5.5178434312195 10.059057 9.371587 $ 755625 10 3355999603599 5.905115 S 361920 73657776 5503695.577455 4543496 71694446623131 5025341 4.569550 S.513564 10.594014 9.SIS147 9. 125540 15 16 17 1S 19 20