Sweet Sounds manufactures hig hquality headphones for music lovers of all styles. The company requires a payback period of less than ve years for any capital budgeting decisions. :I (Click the icon to view the future cash flows.) 5 (Click the icon to view the future value of $1 factors) 5 (Click the icon to view the future value annuity of $1 factors) a (Click the icon to view the present value of $1 factors.) 5 (Click the icon to view the present value annuity of $1 factors.) muired Future cash ows Relevant Cash Flows at End of Each year Today 1 2 3 Initial investment (135,000) Annual cash flows from operations (excluding depreciation] 45,000 45,000 45,000 45,000 Cash ow from sale of machine 0 Required return on investment 3% Income tax rate 40% Depreciation method straightline CCA rate declining balance for income tax purposes 30% All CF occur at end of year except for the initial investment. X Future value of $1 factors Compound Amount of $1 (The Future Value of $1) S= P(1 + 7)". In this table P=$1. Periods 2% 4% 6% 8 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% Perior 1.400 1.020 1.040 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.200 1.220 1.240 1.260 1.280 1.300 1.320 1.254 1.300 1.346 1.392 1.440 1.488 1.538 1.588 1.638 1.690 1.742 1.960 1.040 1.082 1.124 1.166 1.210 W N 1.125 1,191 1.260 1.331 1.405 1.482 1.561 1.643 1.728 1.816 1.907 2.000 2.097 2.197 2.300 2.744 1.061 1.360 1.464 1.574 1.689 1.811 1.939 2.074 2.215 2.364 2.520 2.684 2.856 3.036 3.842 1.082 1.170 1.26 2.100 2.288 2.498 2.703 2.932 3.176 3.436 3.713 1.007 5.378 1.104 1.217 1.33 1.469 1.611 1.762 1.925 1.587 1.772 1.974 2.195 2.436 2.700 2.986 3.297 3.635 4.002 4.398 4.827 5.290 7.530 1.126 1.265 1.419 1.316 1.50 1.714 1.949 2.21 2.502 2.826 3.185 3.583 1.023 4.508 5.042 5.629 6.275 6.983 10.541 1.149 1.369 1.594 1.851 2.144 2.476 2.853 3.278 3.759 4.300 4.908 5.590 6.353 7.206 8.157 9.217 14.758 1.172 1.195 1.423 1.689 1.999 2.358 2.773 3.252 3.803 4.435 5.160 5.987 6.931 8.005 9.223 10.604 12.166 20.661 8.594 10.086 11.806 13.786 16.060 28.925 10 10 1.219 1.480 1.791 2.159 2.594 3.106 3.707 4.411 5.234 6.192 7.305 1.243 1.539 1.898 2.332 2.853 3.479 4.226 5.117 6.176 7.430 8.912 10.657 12.708 15.112 17.922 21.199 40.496 11 12 1.268 1.601 2.012 2.518 3.138 3.896 4.818 5.936 7.288 8.916 10.872 13.215 16.012 19.343 23.298 27.983 56.694 12 13 1.294 1.665 2.133 2.720 3.452 4.363 5.492 6.886 8.599 10.699 13.264 16.386 20.175 24.759 30.288 36.937 79.371 13 14 1.319 1.732 2.261 2.937 3.797 4.887 6.261 7.988 10.147 12.839 16.182 20.319 25.421 31.691 39.374 48.757 111.120 14 40.565 51.186 64.359 155.568 15 15 1.346 1.801 2.397 3.172 4.177 5.474 7.138 9.266 11.974 15.407 19.742 25.196 32.030 31.243 40.358 51.923 66.542 84.954 217.795 16 16 1.373 1.873 2.540 3.426 4.595 6.130 8.137 10.748 14.129 18.488 24.086 9.276 12.468 16.672 22.186 29.384 38.741 50.851 66.461 86.504 112.139 304.913 17 17 1.400 1.948 2.693 3.700 5.054 6.866 2.854 3.996 5.560 7.690 10.575 14.463 19.673 26.623 35.849 48.039 64.072 85.071 112.455 148.024 426.879 18 1.428 2.026 19 1.457 2.107 3.026 4.316 6.116 8.613 12.056 16.777 23.214 31.948 43.736 59.568 80.731 108.890 146.192 195.391 597.630 19 836.683 1.486 2.191 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 53.358 73.864 101.721 139.380 190.050 257.916 2.279 3.400 5.034 7.400 10.804 15.668 22.574 32.324 46.005 65.096 91.592 128.169 178.406 247.065 340.449 1171.356 1.516 321.184 449.393 1639.898 1.546 2.370 3.604 5.437 8.140 12.100 17.861 26.186 38.142 55.206 79.418 113.574 161.492 228.360 140.831 203.480 292.300 417.539 593.199 2295.857 1.577 2.465 3.820 5.871 8.954 13.552 20.362 30.376 45.008 66.247 96.889 374.144 783.023 24 256.385 542.801 3214.200 24 1.608 2.563 4.049 6.341 9.850 15.179 23.212 35.236 53.109 79.497 118.205 174.631 Print DoneFuture value annuity of $1 factors WWII Mmhmvolm in Mun'lmralfduadnnlvl {I + 4' - I s, - __ I ma as n '5 II. In I": In Ir. II. II. at. m n It. '5 II. as M 1 1M III "III I.\" um llll \"II 1.\" l.\" mu In! I.\" I.\" "II III) In I.\" 2 m m m 1m 1m 2.1111 11* Ill 2.1.) m m m 1H m m m m I 3 3M 1112 3.191 m m 33H 34\"! m 3.372 m am am an \"ll 3.\" 4M as. l 1 \"I! m m m 1811 mm WI 5.03 5.115 5m 5m 5." 5.\" m [131' I31 I.\" 4 5 5.314 ll W m lli m '51. \"11' 1.151 1.\"! III. we I.\" \"I m m m l 8 m m 5535 1.33 ms 8.115 8.53 "I? m: um um 1m ".5\" 12.15 11.15 I!\" m '1 1.61 In I.\" m m min \"a 11.41! IZIE 1m 11?\" lli Im m 1m: mm as: B m III-I m mm ll.\" mm mm m 1m um "I! 11123 an 31.\" an m was 9 9.15 ll.\" 11.01 11.4\" 13.5\" 11.75 m 11.51! ms mm am all! an 83 32.015 an \".153 Ill um 11m 1118'! 1m um I?\" m 11.311 mm m am 31113 an m m \"MI I)\" ll ll 12.13 11\" m li mm was 3.1115 1.1131 1175 3|! m m 5831 am M $3.11!. QM I 1! M! mm m 1m 1131 3.13 2131 ms I331 3.5m III" M 5'33 MN m I\" 18.235 1: 13 m I'm III 21.1\" m an m I)" mm m m H1111 11151 as: um um um I! III m 1m 21.1115 31 215 8.315 m 3131 um um $.15 m m HIS mm 111313 \"In M 1J 15 mm m m 21.15! 31.71! mm can 51.\" I.\" m ll! lull! mm 141.\" 131.8 mm am 1! 13 am am: m m m m m an nu mu m Ian" Isun mm mm: all sum 1| 1? m: M 3.213 3.1511 1155 an: 9.11! 211513 I?\" m m 151.153 191.75 man \"I" 3111' mm 1' II 2111! m m man an 5.1!! cm Ill" mm 13.11? mm In an! an $11.91! \"I. 1mm ll 19 22111 11571 man ll\" 51.19 man mu m 111111 154.10 191.3! m \"HI m In.\" NH?! 1.155 1! 111 m 1171' I.\" 6.32 57115 um um: um 1m mm mm m \"I.\" mm mm m m I 21 I.\" 31.\" m m am I'll\" Ill.\" 131..\" mm m \"I\" mus H110 mm mm: INJ'H mun I 22 an 3131' an m TIM 1m 1M 1571)"! m 271.031 an: w 311.23 I'll.\" 1".\" 1031.111 \"1.815 2 23 m \"1| m m mm mm mm mm m mm m: mm mm 1\" 1m \".5131"! I I! m an: m IN \"'1' 1111! 1\" 11m 2...! m mm m \"1 1m 1mm mm m I 1 > Present value of $1 factors Present Value of $1 S P In this table S= $1. (1+ m Park 20% 22% 24% 26% 28% 30% 32%% 40% Periods 2% 4% 6% 8% 10% 12% 14% 16%% 18% 0.980 0,962 0.943 0,926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.714 0.650 0.630 0.610 0.592 0.574 0.510 IN 0.961 0.925 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.672 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.364 0.942 0.889 0.840 0.794 0.751 0.712 0.675 0.641 0.397 0.373 0.350 0.329 0.260 0.924 0.855 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.451 0.423 0.402 0.370 0.341 0.315 0.291 0.269 0.250 0.186 0.906 0.822 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.888 0.790 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.189 0.133 0.354 0.314 0.279 0.249 0.222 0.198 0.178 0.159 0.143 0.095 0.871 0,760 0.665 0.583 0.513 0.452 0.400 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.204 0.179 0.157 0.139 0,123 0.108 0.068 0.263 0.225 0.194 0.167 0.144 0.125 0,108 0.094 0.082 0.048 0.837 0.703 0.592 0.500 0.424 0.361 0.308 0.820 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.137 0.116 0.099 0.085 0.073 0.062 0.035 0.676 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 0.094 0.079 0.066 0.056 0.047 0.025 0.804 0.650 0.527 0.788 0.625 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.092 0.076 0.062 0.052 0.043 0.036 0.018 0.050 0.040 0.033 0.027 0.013 0.773 0.601 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 0.061 0.160 0.125 0.099 0.078 0.062 0.049 0.039 0.032 0.025 0.021 0.009 0.758 3,577 0.442 0.340 0.263 0.205 0.108 0.084 0.065 0.051 0.040 0.031 0.025 0.020 0.016 0.006 0.743 0,555 0.417 0.315 0.239 0.183 0,140 0.015 0.012 0.005 0.728 0.534 0.394 0.292 0.218 0.163 0.123 0.093 0.071 0.054 0.042 0.032 0.025 0.019 0.270 0.198 0,146 0.108 0.080 0.060 0.045 0.034 0.026 0.020 0.015 0.012 0.009 0.003 0714 0.513 0.371 0.002 0.700 0.494 0.350 0.250 0.180 0.130 0.095 0.069 0.051 0.038 0.028 0.021 0.016 0.012 0.009 0.007 0.012 0.009 0.007 0.005 0.002 0.686 0.475 0.331 0.232 0.164 0.116 0.083 0.060 0.043 0.031 0.023 0.017 0.051 0.037 0.026 0.019 0.014 0.010 0.007 0.005 0.004 0.001 0.673 0.456 0.312 0.215 0.149 0,104 0.073 0.660 0.439 0.294 0.199 0.135 0.093 0.064 0.044 0.031 0.022 0.015 0.01 1 0.008 0.006 0.004 0.013 0.001 0.647 0.422 0.278 0.184 0.123 0.083 0.056 0.038 0.026 0.018 0.013 0.009 0.006 0.004 0.003 0.002 0.001 0.133 0.027 0.015 0.010 0.007 0.005 0.013 0.002 0.002 0.000 0.634 0.406 0.262 0.170 0.112 0.074 0.049 no12 non n n nm nom n nna nmi innn n 150 n im n n12 n na Print DonePresent value annuity of $1 factors Present Value of Annuity $1 in Arrears* Po = 1 1 1 1 1 + of 22%% 24% 26% 28%% 30% 32%% 40% Perio Periods 2% 4% 6% 8% 10% 12% 14% 16%% 18% 20% 0,943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.714 0.980 0.962 1.942 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.492 1.457 1.424 1.392 1.361 1.331 1.224 2.106 2.042 1.981 1.923 1.868 1.816 1.766 1.589 2.884 2.775 2673 2.577 2.487 2.402 2.322 2.246 2.174 2.494 2.404 2.320 2.241 2.166 2.096 1.849 3.808 3.630 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 4,713 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 2.745 2.635 2.532 2.436 2.345 2.035 2.759 2.643 2.534 2.168 5.60 5.242 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 3.167 3.020 2.885 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 3.242 3.083 2.937 2.802 2.677 2.263 6.472 6.002 2.925 2.786 2.331 7.325 6.733 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 3.619 3.421 3.241 3.076 8.162 7.435 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.786 3.566 3.366 3.184 3.019 2.868 2.379 8.111 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 3.923 3.682 3.465 3.269 3.092 2.930 2.414 10 10 8.983 6.495 5.938 5.453 5.029 4.656 4.327 4.035 3.776 3.543 3.335 3.147 2.978 2.438 11 9.787 8.760 7.887 7.139 7.536 6.194 5.660 5.197 4.793 4.439 4.127 3.851 3.606 3.387 3.190 3.013 2.456 12 12 10.575 9.385 8.384 6.814 3.223 3.040 2.469 13 13 11.348 9.986 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.912 3.656 3.427 5.468 5.008 4.611 4.265 3.962 3.695 3.459 3.249 3.061 2.478 14 14 12.106 10.563 9.295 8.244 7.367 6.628 6.002 3.076 2.484 15 15 12.849 11.118 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.315 4.001 3.726 3.483 3.268 6.974 6.265 5.668 5.162 4.730 4.357 4.033 3.751 3.503 3.283 3.088 2.489 16 16 13.578 11.652 10.106 8.851 7.824 3.771 3.518 3.295 3.097 2.492 17 17 14.292 12.166 10.477 9.122 8.022 7.120 6.373 5.749 5.222 4.775 4.391 4.059 9.372 8.201 7.250 6.467 5.818 5.273 4.812 4.419 4.080 3.786 3.529 3.304 3.104 2.494 18 18 14.992 12.659 10.828 9.604 8.365 7.366 6.550 5.877 5.316 4.843 4.442 4.097 3.799 3.539 3.311 3.109 2.496 19 19 15.678 13.134 11.158 3.316 3.113 2.497 20 20 16.351 13.590 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 4.460 4.110 3.808 3.546 2.498 21 21 17.011 14.029 11.764 10.017 8.649 7.562 6.687 5.973 5.384 4.891 4.476 4,121 3.816 3.551 3.320 3.116 4.488 4,130 3.822 3,556 3.323 3.118 2.498 22 22 17.658 14.451 12 042 10.201 8.772 7.645 6.743 6.011 5.410 4.909 Print DoneRequired 1. Does the project meet the requirements? 2. Is the inyestment protable? Hint: Calculate NPV. 3. Could you know the amount of tax shield lost on disposal without doing any calculations? Why should the payback period not be the sole basis for a capital budgeting decision? Requirement 1. Does the project meet the requirements? (Round your final answer to two decimal places.) because the payback period of the investment is | year(s), which is the required payback period. Requirement 2. Calculate the NPV of the investment. (Use factors to three decimal places, X.XXX. Use a minus sign or parentheses for a negative net present value. Round your final answer to the nearest whole dollar.) The net present value of the investment is $Requirement 3. Could you know the amount of tax shield lost on disposal without doing any calculations? Why should the payback period not be the sole basis for a capital budgeting deCisien'7 Choose the correct answer below 0 A. No, because the salvage value of the machine is $0 so a formula needs to be used 0 B. Yes, because the salvage value of the machine is $0 so there is no tax shield lost O C. Yes, because the salvage value of the machine is $45,000 so there is no tax shield lost G) D. No, because the salvage value of the machine is $45,000 so a formula needs to be used Why should the payback period not be the sole basis for a capital budgeting decision? Choose the correct statement below. 0 A. The NPV is positive despite meeting the payback period requirement because the payback method does not consider the time value of money. 0 B. The NPV is positive and meets the payback period requirement because the payback method considers the time value ofmoney. O C. The NPV is negative despite meeting the payback period requirement because the payback method considers the time value of money. G) D. The NPV is negative despite meeting the payback period requirement because the payback method does not consider the time value of money