Sonoma is considering investing in solar paneling for the roof of its large distribution facility. The investment will cost $9 million and have a six-year useful life and no residual value. Because of rising utility costs, the company expects the yearly utility savings to increase over time, as follows: E: (Click the icon to view the yearly utility savings.) Company policy requires a payback period of less than five years and an ARR of at least 10%. Any potential investments that do not meet these criteria will be removed from further consideration. The solar panels have already passed the payback period and ARR screening. (Click the icon to view the present value annuity factor table.) 3 (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) (Click the icon to view the future value factor table.) 1. Compute the NPV of the solar panels, given the company's 12% hurdle rate. 2. Estimate the IRR of the solar panels. Use Excel to find the exact IRR. 3. Should Sonoma invest in the solar paneling? Why or why not? 1. Compute the NPV of the solar panels, given the company's 12% hurdle rate. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV is $ 2. Estimate the IRR of the solar panels. Use Excel to find the exact IRR. (Round your answer to two decimal places.) The IRR is somewhere between . The exact IRR using Excel is%. 3. Should Sonoma invest in the solar paneling? Why or why not? 10% The solar panel proposal meets of the company's capital investment decisions. It has a payback of V five years and an ARR of VNPV which indicates that the IRR is the company's 12% hurdle rate. Therefore, the solar panels appear to be a financial standpoint. It has a investment from a Enter your answer in each of the answer boxes. Year 1 $ 1,000,000 Year 2 $ 1,500,000 Year 3 $ 2,000,000 Year 4 $ 2,500,000 Year 5 $ 3,500,000 Year 6 $ 4,500,000 Periods 2 14% 0.877 1.647 2.322 2.914 3.433 4 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 7 Present Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 5.795 5.601 5.417 5.2425.076 4.917 4.623 4.355 4.111 6.728 6.472 6.230 6.0025.786 5.5825.206 4.868 4.564 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 8.566 8.1627.786 7.435 7.108 6.802 6.247 5.759 5.328 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 9 10 18% 20% 0.847 0.833 1.566 1.528 2.174 2.106 2.690 2.589 3.127 2.991 3.498 3.326 3.812 3.605 4.078 3.837 4.303 4.031 4.494 4.192 4.656 4.327 4.793 4.439 4.910 4.533 5.008 4.611 5.092 4.675 5.353 4.870 5.467 4.948 5.517 4.979 5.548 4.997 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.623 6.873 7.003 7.105 11 12 13 14 15 5.029 5.197 5.342 5.468 5.575 5.929 6.097 6.177 6.233 20 25 30 40 Periods 1 2 1% 1.000 2010 3.030 4060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.000 3.091 4.184 5.309 4% 1.000 2.040 3.122 4 246 5.416 4 co 6.633 6 7 8 7.898 6.308 7.434 8.583 9.755 10.950 9 10 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 22.019 28 243 34.785 48.886 Future Value of Annuity of $1 5% 6% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.060 2.080 2.100 3.153 3.184 3.246 3.310 4310 4 375 4.506 4.641 5.526 5.637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11.027 11.491 12.488 13.579 12.578 13.181 14.487 15.937 14.207 14.972 16.645 18.531 15.917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21.015 24.215 27.975 21.579 23.27 27.152 31.772 33.066 36.786 45.762 57 275 47.727 54.865 73.106 98.347 66.439 79.058 113.283 164494 120.800 154.762 259.057 442593 6.468 7.662 8.892 10.159 11.484 12.808 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 11 12 13 14 15 20 25 30 40 12% 1.000 2.120 3.374 4.779 6.353 8.115 10.089 12.300 14.776 17.549 20.655 24.133 28.029 32.393 37.280 72.052 133.334 241.333 767.091 9.214 10.583 12.006 13.486 15.026 16.627 18.292 20.024 29.778 41.646 56.085 95.026 14% 16% 18% 20% 1.000 1.000 1.000 1.000 2.140 2.160 2.180 2.200 3.440 3.506 3.572 3.640 4.921 5.066 5.215 5.368 6.610 6.877 7.154 7.442 8.536 8.977 9.442 9.930 10.730 11.414 12.142 12.916 13.233 14.240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 23.045 25.733 28.755 32.150 27.271 30.850 34.931 39.581 32.089 36.786 42.219 48.497 37.581 43.672 50.818 59.196 43.842 51.660 60.965 72.035 91.025 115.380 146.628 186.688 181.871 249.214 342.603 471.981 356.787 530.312 790.948 1,181.882 1,342025 2,360.757 4,163.213 7,343.858 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 Periods 1 2 3 4 18% 0.847 0.718 0.609 0.516 0.437 5 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 1% 2% 3% 0.990 0.980 0.971 0.980 0.961 0.943 0.971 0.942 0.915 0.961 0.924 0.888 0.951 0.906 0.863 0.942 0.888 0.837 0.933 0.871 0.813 0.923 0.853 0.789 0.914 0.837 0.766 0.905 0.820 0.744 0.896 0.804 0.722 0.887 0.788 0.701 0.879 0.773 0.681 0.870 0.758 0.661 0.861 0.743 0.642 0.820 0.673 0.554 0.780 0.610 0.478 0.742 0.552 0.412 0.672 0.453 0.307 6 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 Present Value of $1 5% 6% 8% 10% 0.952 0.943 0.926 0.909 0.907 0.890 0.857 0.826 0.864 0.840 0.794 0.751 0.823 0.792 0.735 0.683 0.784 0.747 0.681 0.621 0.746 0.705 0.630 0.564 0.711 0.665 0.583 0.513 0.677 0.627 0.540 0.467 0.645 0.592 0.500 0.424 0.614 0.558 0.463 0.386 0.585 0.527 0.429 0.350 0.557 0.497 0.397 0.319 0.530 0.469 0.368 0.290 0.505 0.442 0.340 0.263 0.481 0.417 0.315 0.239 0.377 0.312 0.215 0.149 0.295 0.233 0.146 0.092 0.231 0.174 0.099 0.057 0.142 0.097 0.046 0.022 12% 14% 0.893 0.877 0.797 0.769 0.712 0.675 0.636 0.592 0.567 0.519 0.507 0.456 0.452 0.400 0.404 0.351 0.361 0.308 0.322 0.270 0.287 0.237 0.257 0.208 0.229 0.182 0.205 0.160 0.183 0.140 0.104 0.073 0.059 0.038 0.033 0.020 0.011 10 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 11 12 13 14 15 0.650 0.625 0.601 0.577 0.555 0.456 0.375 0.308 0.208 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.037 0.016 0.007 0.001 0.195 0.168 0.145 0.125 0.108 20 25 30 40 0.051 0.024 0.012 0.003 0.026 0.010 0.004 0.001 0.005 Periods 1 1% 1.010 1.020 1.030 1.041 1.051 2 3 16% 1.160 1.346 1.561 1.811 2.100 10% 1.100 1.210 1.331 1.484 1.611 4 2% 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195 1.219 3% 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1.344 5 4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 5% 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 Future Value of $1 6% 8% 1.060 1.080 1.124 1.166 1.191 1.260 1.262 1.360 1338 1.469 1.419 1.587 1.504 1.714 1.594 1.851 1.689 1.999 1.791 2.159 1.898 2.332 2012 2.518 2.133 2.720 2 261 2.937 2.397 3.172 3.207 4.681 4.292 6.848 5.743 10.063 10.286 21.725 18% 1.180 1.392 1.643 1.999 2.288 2.700 3.185 3.759 4.435 5.234 6 7 B 9 10 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 1.062 1.072 1.083 1.094 12% 1.120 1.254 1.405 1.574 1.762 1.974 2211 2.476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 9.646 17.000 29.960 93.051 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188,884 2.436 2.826 3.278 3.803 4.411 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 1.105 11 12 13 1.116 1.127 1.138 1.149 1.161 1.243 1268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 2.653 3.386 4322 7.040 6.176 7.288 8.599 10.147 11.974 27.393 62.669 143.371 750.378 15 20 25 30 40 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85,850 378.721 7.430 8.916 10.699 12.839 15.407 38.338 95.396 237.376 1,469.772 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2094 2.427 3.262 2.191 2.666 3.243 4.801 6.727 10.835 17.449 45.259