St. Germaine Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $900,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view the present value table.) (Click the icon to view the future value table.) Read the requirements. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) Requirement 1. Compute this project's NPV using St. Germaine Industries' 16% hurdle rate. Should St. Germaine Industries invest in the equipment? Why or why not? Begin by computing the project's NPV (net present value). (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) Net present value Data table Year 1..... $264,000 Year 2...... $250,000 Year 3...... $225,000 Year 4..... $212,000 Year 5..... $201,000 Year 6... $175,000 Reference Present Value of $1 Periods 1% 2% 3% 4% 5% Period 1 0.990 0.980 0.971 0.962 Period 2 0.980 0.961 0.943 0.925 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 Period 11 0.896 0.942 0.915 0.924 0.888 0.855 0.906 0.863 0.822 0.888 0.837 0.871 0.813 0.853 0.789 0.837 0.766 0.820 0.744 0.889 0.784 6% 8% 10% 12% 14% 16% 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.864 0.840 0.794 0.751 0.823 0.792 0.735 0.683 0.747 0.681 0.621 18% 20% 0.712 0.675 0.641 0.609 0.579 0.636 0.592 0.552 0.567 0.519 0.476 0.516 0.437 0.482 0.402 0.790 0.746 0.705 0.760 0.711 0.665 0.731 0.677 0.627 0.703 0.645 0.592 0.676 0.614 0.558 0.804 0.722 0.650 0.585 0.527 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 0.788 0.701 0.625 0.557 0.497 0.429 0.350 0.397 0.319 0.773 0.758 0.681 0.601 0.530 0.469 0.368 0.290 0.661 0.577 0.505 0.442 0.340 0.743 0.642 0.555 0.481 0.417 0.263 0.315 0.239 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.287 0.237 0.195 0.162 0.135 0.257 0.208 0.168 0.137 0.112 0.229 0.182 0.145 0.116 0.093 0.205 0.160 0.125 0.099 0.078 0.183 0.140 0.108 0.084 0.065 Period 20 0.820 Period 25 0.780 0.673 0.554 0.456 0.377 0.610 0.478 0.375 0.295 Period 30 0.742 0.552 0.412 0.308 0.231 Period 40 0.672 0.453 0.307 0.208 0.142 0.312 0.215 0.149 0.104 0.233 0.146 0.092 0.059 0.174 0.099 0.057 0.033 0.097 0.046 0.022 0.011 0.073 0.051 0.037 0.026 0.038 0.024 0.016 0.010 0.020 0.012 0.007 0.004 0.005 0.003 0.001 0.001 Reference Future Value of $1 Periods Period 1 1% 2% 3% 4% 5% 6% 8% 10% 12% 1.010 1.020 1.030 1.040 1.050 1.060 1.080 1.100 Period 2 1.020 1.040 1.061 1.082 1.103 Period 3 Period 4 1.041 Period 5 1.051 1.030 1.061 1.093 1.125 1.158 1.082 1.126 1.170 1.216 1.262 1.360 1.104 1.159 1.217 1.276 1.338 1.124 1.166 1.210 1.191 1.260 1.331 1.464 1.469 1.611 14% 16% 18% 20% 1.120 1.140 1.160 1.180 1.200 1.254 1.300 1.346 1.392 1.440 1.405 1.482 1.561 1.643 1.728 1.574 1.689 1.811 1.939 2.074 1.762 1.925 2.100 2.288 2.488 Period 6 1.062 1.126 1.194 1.265 1.340 1.419 1.587 1.772 1.974 2.195 2.436 2.700 2.986 Period 7 1.072 1.149 1.230 1.316 1.407 1.504 1.714 1.949 2.211 2.502 2.826 3.185 3.583 Period 8 1.083 1.172 1.267 1.369 1.477 1.594 Period 9 1.094 1.195 1.305 1.423 1.551 1.689 1.999 1.851 2.144 2.358 Period 10 1.105 1.219 1.344 1.480 1.629 1.791 2.159 2.476 2.773 2.594 3.106 2.853 3.278 3.759 4.300 3.252 3.803 3.707 4.411 5.234 4.435 5.160 6.192 Period 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 2.853 3.479 Period 12 1.127 Period 13 1.138 Period 14 1.149 Period 15 1.161 1.346 1.268 1.426 1.601 1.796 1.294 1.469 1.665 1.886 2.133 1.319 1.513 1.732 1.980 2.261 1.558 1.801 2.079 2.397 2.012 2.518 3.138 3.896 2.720 3.452 4.363 2.937 3.797 4.887 3.172 4.177 5.474 4.226 5.117 4.818 5.936 7.288 5.492 6.886 6.261 7.988 10.147 7.138 9.266 11.974 6.176 7.430 8.916 8.599 10.699 12.839 15.407 Period 20 1.220 Period 25 1.282 Period 30 1.348 Period 40 1.489 1.486 1.806 2.191 2.653 1.641 2.094 2.666 3.386 1.811 2.427 3.243 4.322 2.208 3.262 4.801 7.040 3.207 4.661 6.727 4.292 6.848 10.835 5.743 10.063 17.449 10.286 21.725 45.259 9.646 13.743 19.461 27.393 17.000 26.462 40.874 62.669 95.396 29.960 | 50.950 85.850 143.371 237.376 38.338 93.051 188.884 378.721 750.378 1,469.772 Reference Present Value of Annuity of $1 Periods 2% 3% Period 2 1.970 Period 3 2.941 Period 4 3.902 Period 5 4.853 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 Period 10 9.471 1% 4% 5% 6% 8% 10% 12% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 1.942 1.913 | 1.886 1.859 1.833 1.783 1.736 1.690 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 Period 13 12.134 11.348 10.635 9.986 9.394 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 8.244 7.367 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 14% 16% 18% 20% 0.862 0.877 1.647 1.605 2.322 2.246 2.914 2.798 2.690 3.433 3.274 3.127 3.889 3.685 3.498 3.326 0.847 0.833 1.566 1.528 2.174 2.106 2.589 2.991 4.288 4.039 3.812 3.605 4.946 5.216 4.639 4.344 4.607 4.833 4.078 3.837 4.494 4.303 4.031 4.192 5.453 5.660 5.029 4.656 4.327 8.853 9.295 5.575 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413| 15.622| 14.094 12.783| 10.675 9.077 7.843 Period 30 25.808 22.396 | 19.600 17.292 15.372 13.765| 11.258 9.427 8.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 5.197 5.842 5.342 4.910 6.002 6.142 6.623 5.929 6.873 6.097 7.003 7.105 6.233 4.793 4.439 4.533 5.468 5.008 4.611 5.092 4.675 5.353 4.870 5.467 4.948 6.177 5.517 4.979 5.548 4.997 Reference Future Value of Annuity of $1 Periods Period 1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 Period 3 3.030 3.060 3.091 3.122 3.153 Period 4 4.060 4.122 4.184 4.246 Period 5 5.101 5.204 5.309 5.416 3.184 4.310 4.375 4.506 4.641 5.526 5.637 5.867 3.246 3.310 3.374 3.440 3.506 3.572 3.640 4.779 4.921 5.066 5.215 5.368 6.105 6.353 6.610 6.877 7.154 7.442 Period 6 6.152 6.308 6.468 6.633 Period 7 7.214 7.434 7.662 7.898 Period 8 8.286 8.583 8.892 9.214 Period 9 Period 10 9.369 9.755 10.462 10.950 10.159 10.583 11.464 | 12.006 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.549 9.897 10.637 11.027 11.491 12.488 12.578 13.181 14.487 8.115 8.536 8.977 9.442 9.930 9.487 10.089 10.730 11.414 12.142 12.916 11.436 12.300 13.579 | 14.776 15.937 | 17.549 13.233 14.240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 Period 11 Period 12 Period 13 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 13.809 14.680 15.618 16.627 17.713 23.045 25.733 28.755 32.150 27.271 30.850 34.931 39.581 Period 14 Period 15 18.882 21.495 24.523 28.029 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 32.089 36.786 42.219 48.497 37.581 43.672 50.818 59.196 43.842 51.660 60.965 72.035 Period 20 Period 25 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 28.243 32.030 | 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 Period 30 34.785 40.568 47.575 56.085 | 66.439 79.058 113.283 164.494 241.333 356.787 Period 40 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343.858 91.025 115.380 146.628 186.688 249.214 342.603 471.981 530.312 790.948 1,181.882