Stuart Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company's cash outflow for operating expenses by $1,276,000 per year. The cost of the equipment is $6,957,687.31. Stuart expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.) b. Indicate whether the investment opportunity should be accepted. a. Internal rate of return % b. Should the investment opportunity be accepted? TABLE 1 PRESENT VALUE OF $1 n 4% 6% 7% 9% 10% 12% 14% 16% 20% 1 0.877193 2. 0.769468 3 4 0.917431 0.841680 0.772 183 0.708425 0.649931 0.596267 0.547034 0.501866 5 6 7 S 9 0.961535 0.924556 O.SS5996 0.854504 0.821927 0.790315 0.759918 0.730690 0.702587 0.675564 0.649551 0.624597 0.600574 0.577475 0.555265 0.53390S 0.513373 0.493628 0.460428 0.934579 0.873439 0.816295 0.762895 0.712986 0.666342 0.622750 0.582009 0.543934 0.508 349 0.475093 0.444012 0.414964 0.387817 0.362446 0.338735 5% 0.952381 0.907029 0.863835 0.522702 0.783526 0.746215 0.710681 0.676839 0.644609 0.613913 0.584679 0.556837 0.530321 0.50506S 0.481017 0.458112 0.436297 0.415521 0.395734 0.376889 10 0.943396 0.889996 0.839619 0.792094 0.747255 0.704961 0.665057 0.627412 0.591 89S 0.558395 0.526785 0.496969 0.468839 0.442301 0.417265 0.393646 0.371364 0.350344 0.330513 0.31 1805 8% 0.925926 0.857339 0.793832 0.735030 0.680583 0.630170 0.583490 0.540269 0.500249 0.463193 0.428883 0.397114 0.367698 0.340461 0.315242 0.291 890 0.270269 0.250249 0.231712 0.214548 0.909091 0.826446 0.751315 0.683013 0.620921 0.564474 0.513155 0.466507 0.424098 0.385543 0.350494 0.315631 0.289664 0.263331 0.239392 0.217629 0.197845 0.179859 0.163505 0.145644 0.892857 0.797194 0.711750 0.635518 0.567427 0.506631 0.452349 0.403883 0.360610 0.321973 0.287476 0.256675 0.229174 0.204620 0.182696 0.163122 0.145644 0.130040 0.116107 0.103667 0.422411 0.387533 0.355535 0.326179 0.299246 0.274538 0.251870 0.862069 0.743163 0.640655 0.552291 0.476113 0.410442 0.353830 0.305025 0.262953 0.226684 0.195417 0.168463 0.145227 0.125195 0.107927 0.093041 0.080207 0.069144 0.059607 0.051385 0.674972 0.592080 0.519369 0.455587 0.399637 0.350559 0.307508 0.269744 0.236617 0.207559 0.182069 0.159710 0.140096 0.122892 0.107800 0.094561 0.082948 0.072762 11 0.833333 0.694444 0.578704 0.482253 0.401875 0.334898 0.279082 0.232565 0.193807 0.161506 0.1345SS 0.112157 0.093464 0.077887 0.064905 0.0540SS 0.045073 0.037561 0.031301 0.026084 12 13 14 15 16 17 18 0.316574 0.295564 0.27650S 0.258419 0.231073 0.211994 0.194490 0.175431 19 0.474642 0.456387 20 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 6% 7% 1 4% 0.961535 1.586095 2.775091 2 3 4 3.629895 4.451822 5 6 7 S 9 10 5% 0.952381 1.859410 2.723245 3.545951 4.329477 5.075692 5.786373 6.463213 7.107822 7.72 1735 8.306414 S.563252 9.393573 9.898641 10.379658 10.837770 11.274066 11.689557 12.085321 12.462210 0.943396 1.833393 2.673012 3.465106 4.212364 4.917324 5.582351 6.209794 6.S01692 7.360087 7.886875 S.383544 S.S52683 9.294994 9.712249 10.105895 10.477260 10.827603 11.158116 11.469921 5.242137 6.002055 6.732745 7.435332 S.110896 8.760477 9.385074 9.985648 10.563123 11.118357 11.652296 12.165669 12.659297 13.133939 13.590326 0.934579 1. SOSOIS 2.624316 3.387211 4.100197 4.766540 5.389259 5.971299 6.515232 7.023582 7.495674 7.942686 S.357651 8.74546S 9.107914 9.446649 9.763223 10.059087 10.335595 10.594014 8% 0.925926 1.783265 2.577097 3.312127 3.992710 4.622880 5.206370 5.746639 6.246SSS 6.710051 7.138964 7.536075 7.903776 8.244237 8.559479 8.851369 9.121638 9.371 SS7 9.603599 9.S18147 9% 0.917431 1.759111 2.531295 3.239720 3.889651 4.485919 5.032953 5.534819 5.995247 6.417658 6.S05191 7.160725 7.486904 7.786150 8.0606SS 8.312558 8.543631 8.755625 8.905115 9.128546 10% 0.909091 1.735537 2.486852 3.169565 3.790787 4.355261 4.868419 5.334926 5.759024 6.144567 6.495061 6.813692 7.103356 7.366687 7.606080 7.823709 8.021553 S.201412 8.364920 8.513564 12% 0.892857 1.690051 2.401831 3.037349 3.604776 4.111407 4.563757 4.967640 5.328250 5.650223 5.937699 6.194374 6.423548 6.628168 6.S10864 6.973986 7.119630 7.249670 7.365777 7.469444 14% 0.577193 1.646661 2.321632 2.913712 3.433081 3.SSS66S 4.288305 4.638564 4.946372 5.216116 5.452733 5.660292 5.842362 6.002072 6.142168 6.265060 6.372859 6.467420 6.550369 6.623131 16% 20% 0.562069 0.833333 1.605232 1.527778 2.245890 2.106481 2.79SISI 2.585735 3.274294 2.990612 3.684736 3.325510 4.038565 3.604592 4.343591 3.837160 4.606544 4.030967 4.833227 4.192472 5.028644 4.327060 5.197107 4.439217 5.342334 4.532681 5.467529 4.610567 5.575456 4.675473 5.668497 4.729561 5.748704 4.774634 5.817848 4.812195 5.877455 4.843496 5.928841 4.869580 11 12 13 14 15 16 17 18 19 20