T122-1 (similar to) Question Help Home Life Company operates a number of home improvement stores in a metropolitan area. Home Life's management estimates that if it invests $230,000 in a new computer system, it can save $62,000 in annual cash operating costs. The system has an expected useful life of 8 years and no terminal disposal value. The required rate of return is 8%. Ignore income tax issues and assume all cash flows occur at year-end except for initial investment amounts Present Value of 51 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements a. Calculate the net present value for the new computer system (Abbreviations used: FV = future value; PV = present value. Use factor amounts rounded to three decimal places. Round your answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value) First, select the formula labels, then enter the amounts and calculate the net present value. Cost of system FV of $1 at 8% Annual cash operating costs 230,000 62,000 Net present value et present value for the new computer system. (Abbreviations used: FV = future value, PV = present value I to three decimal places. Round your answers to the nearest whole dollar. Use a minus sign or parentheses Formula labels, then enter the amounts and calculate the net present value. FV of $1 at 8% Annual cash operating costs Net prese et of system 230,000 62,000 * Requirements Calculate the following for the new computer system: a. Net present value, and b. Internal rate of return (using the interpolation method) Print Done 562 cash Reference Pres Read 3. CA to the First 0.500 0.497 Present Value of $1 Periods 4% 6% 8% 10% 125 Period 1 090 0962 0.943 0926 0509 0.893 Period 2 0.961 0.925 0.890 0857 0.826 0.797 Period 3 69420889 0 840 0.796 0751 0712 Period 4 0324 0855 0792 0.735 0.683 0.636 Period 5 0 906 0822 0.747 0.681 0.521 0 567 Period 6 0 888 0.790 0.705 0 630 0.564 0507 Period 7 0 871 0.760 0.66% 0583 0513 0.452 Periods 0 253 0731 0.527 0.500 0467 0.404 Period 9 0837 0.703 0592 0424 0.361 Period 10 0 820 0.676 0.558 0.463 0386 0.322 Period 11 0.804 0.650 0521 0.429 0.350 0287 Period 12 0788 0.025 0.397 0319 0 257 Period 13 0.773 0601 0.469 0.368 0.290 0229 Period 14 0.758 0.577 0.442 0340 0263 0 205 Period 15 0.743 0.555 0.417 0.315 0.239 0.183 Period 16 720 0.534 0.394 0292 0218 0.163 Period 17 0714 0.513 0.371 0270 0190 0.146 Period 18 0.700 0494 0.350 0.250 0.180 0.130 Period 19 0.686 0475 0331 0232 0.154 0 116 Period 20 0673 0456 0.312 0215 0 149 0.104 Period 21 0660 0.439 0294 0.199 0.135 0.093 Period 22 0 647 0422 0.278 DBA 0.123 0.083 Period 23 0634 0.406 0.262 0 170 0.112 0.074 Period 24 0622 0350 0247 0.158 9.102 0.066 Period 25 0610 0.375 0233 0146 0092 059 Period 26 0 5900.361 0220 0.115 0084 0053 Period 27 0506 0347 0207 0.125 0076 0047 Period 20 574 0333 0.196 0116 0.069 0.042 Period 29 0563 0.321 0.185 0.107 0063 0.037 Period 30 0.552 000 0.174 0.099 9057 0.033 Period 35 0.500 0.253 0 130 0.0GB 0036 0.019 Period 40 0.453 0.208 0 097 0.016 0022 0011 14% 0.877 0.769 0.675 0592 0519 0.456 0.400 0 351 0 308 0.270 0.237 0208 0.102 0.160 0.140 0.123 0.100 0 095 0.083 0023 0.064 0.056 0649 0043 0038 0.033 0.029 0.026 0022 0.020 0010 0.005 16% 0.062 0.743 0641 0552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0 100 0093 0.080 0.069 0060 0051 0.046 0038 0.033 0028 0.024 0.021 O 050 0016 0.014 0.012 DODG 9003 18% 0.847 718 0 609 0.516 0.437 0.370 0.314 0.256 0.225 0.191 0.162 0.137 0 116 0.099 0.004 0.071 0.060 0.051 0.00 0.037 0.031 0.026 0.022 0019 0.016 0.014 0.011 0010 0.000 0907 0.003 0001 20% 22% 20% 26% 28% 30% 32% 40% Periods 0.833 0 820 0.806 0.794 0.781 0.769 0758 0.714 Period 1 0.694 0.672 0.650 0.630 0610 0.592 0.574 0.510 Period 2 0.579 0551 0.524 0.500 0.477 0.455 0435 0.364 Period 3 0.482 0.451 0.423 0397 0.373 0.350 0.329 0.250 Period 4 0.402 0.370 0.341 0.315 0.291 0.269 0.250 0.186 Period 5 0335 0.303 0275 0 250 0227 0.207 0.189 0 133 Period 6 0 279 0.249 0.222 0.198 0.178 0.159 0.143 0.095 Period 7 0233 0.204 0.179 0.157 0.139 0.123 0.105 0.068 Period 8 0.19 0.167 0.144 0.125 0.108 0.094 0.002 0.048 Period 9 0.162 0.137 0.116 0099 0.005 0.073 0.062 0 035 Period 10 0.135 0 112 0.094 0.079 0.066 0.056 0.047 0.025 Period 11 0.112 0092 0.076 0062 0.052 0.063 0.036 0018 Period 12 009) 0.075 0.061 0.050 0.040 0.033 0.027 0.013 Period 13 0078 0.062 0.049 0039 0.032 0.025 0.021 0.009 Period 14 0.065 0051 0.0400031 0.025 0.020 0.016 0.006 Period 15 0.054 0.042 0.032 0.025 0019 0.015 0.012 0.005 Period 16 0.045 0.034 0.026 0.020 0.015 0012 0.009 0.003 Period 17 0.030 0028 0.021 0.016 0.012 0.009 0007 0.002 Period 18 0.031 0.023 0.017 0.012 0.009 0.007 0.005 0.002 Period 19 0026 0.019 0.014 0.010 0.007 0005 0 000 0.001 Period 20 0022 0.015 0011 0.008 0 006 0.004 0003 0.001 Period 21 0.015 0.013 0.009 0006 0.004 0.003 0.002 0.001 Period 22 0.015 0.010 0.007 0.005 0.003 0002 0 002 0.000 Period 23 6013 0.008 0006 0 004 0.003 0.002 0.001 0.000 Period 24 0.010 0.007 0.005 0.003 0.002 0.001 0.001 0.000 Period 25 0.000 0.006 0004 0.002 0.002 0.001 0.001 0.000 Perlod 25 0.007 0.005 0003 0.002 0.001 0.001 0.001 0.000 Period 27 0.006 0.004 0002 0.002 0.001 0.001 0 000 0 ODS 0.000 Period 28 0.003 0002 0.001 0.001 0.000 0.000 0.000 Period 29 0.004 0.003 0 002 0.001 0.001 0.000 0.000 0002 0.001 0.000 Period 30 0.001 0.000 0.000 0.000 0 000 0.000 0.000 Period 35 0001 0 000 0 000 0.000 0.000 0.000 0.000 Period 40