T122-2 (similar to) Question Help Classic Home Company operates a number of home Improvement stores in a metropolitan area Classic Home's management estimates that att invests $280.000 in a new computer system, it can save $66,000 in annual cash operating costs. The system has an expected useful life of 8 years and no terminal disposat value. The required rate of return is 6% Ignore income tax issues and assume all cash flows occur at yoar-end except for initial investment amounts Present Vaben soll. table prezentValut. Ol Anulty of $1 table Future Value of $1 Inbet Future Valun of Annuity 0.51. table Read the courtemon Dr Willar 42 15 6 intrative 894 1333 Office NM a. Calculate the payback period 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 not present value) First, select the formula labels, then enter the amounts and calculate the payback period in years Net initial investment Uniform annual cash operating cost savings Payback period 5 280,000 66,000 4.24 b. Calculate the discounted payback period for the computer system Begin calculating the discounted payback period by completing the table to calculate the net initial investment unrecovered at the end of the year. (Enter all amounts as positive numbers. Round the discount factor to three decimal places, Xxxx For amounts with a 50 balance, make sure to enter in the appropriate coll) Cash Discount Discounted Cumulative discounted Net initial investment Year Savings factor cath savings canh savings uncovered at end of year 0 1.000 in Hist. 1 2 3 5 roups 6 7 roup ula labels, then enter the amounts and calculate the payback period in years. tial investment Uniform annual cash operating cost savings 280,000 Payback period GS 24 . counted pay Requirements me discounted e numbers. Calculate the following for the new computer system: DI a. Payback period; and b. Discounted payback period the end oft ke sure to er IS Print Done 22-2 (similar to) Reference 0.108 Present Value of $1 Periods 2% 4% 6% 8% 10% 12% 14% 1 0.980 0.962 0.943 0926 0.909 0.893 0.877 2 0.961 0.925 0.890 0.857 0826 0.797 0.769 3 0.942 0.889 0.8.40 0794 0.751 0712 0 675 4 0924 0.855 0.792 0.735 0.683 0636 0.592 5 0906 0.822 0.747 0681 0621 0.567 0.519 6 0888 0.790 0.705 0630 0.564 0507 0.456 7 0871 0.760 0.665 0.583 0513 0.452 0.400 8 0853 0.731 0.627 0540 0.467 0.404 0351 9 0.837 0.703 0.592 0.500 0.424 0.361 0 308 10 0820 0.676 0558 0.463 0386 0322 0.270 11 0.804 0.550 0.527 0.429 0.350 0287 0237 12 0788 0.625 0497 0.397 0.319 0.257 0.203 13 0.773 0601 0.450 0.368 0.250 0 229 0.102 14 0.758 0577 0.442 0 340 0.263 0205 0.160 15 0.743 0.555 0.417 0.315 0.183 0.140 16 0.728 0534 0394 0.292 0.210 0.163 0.123 17 0.714 0.513 0 371 0270 0.190 0.140 0.100 18 0.700 0494 0 350 0.250 0.100 0.130 0095 19 0.686 0.475 0.331 0232 0.164 0.116 0.003 20 2 0673 0456 0312 0215 0.149 0.104 0073 21 0660 0.439 0.294 0.199 0.135 093 0064 3 22 0.641 0.422 0.278 0 184 0.123 0.083 0.056 23 0634 0.406 0.262 0.170 0.112 0074 0049 24 0.622 0.390 0247 0.150 0.102 0.066 0.043 25 0.610 0.375 0233 0146 0092 0.059 000 20 0.590 6 0 361 0 220 0.135 0004 0053 0033 27 05 017 0207 0.125 0070 0047 0.029 28 0574 0333 0196 0.116 0.069 0042 0024 29 0.560 0321 0185 0 107 0.063 0.037 0.022 30 0.52 0300 0.174 0099 0.057 0.033 0020 15 O 500 0253 0 130 0 060 0.036 0.019 0010 10 0.453 0208 0.097 0046 0022 0.011 0 ODS 0239 16% 0862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0263 0227 0.195 0.168 0 145 0.125 0.108 0.093 0.000 0.069 0.060 0.051 0.044 0030 0033 0028 0.024 0021 0.018 0016 0.014 0012 0006 0.003 18% 20% 22% 24% 26% 28% 30% 32% 40% Periods 0.847 0833 0.820 0 806 0.794 0.781 0.769 0.758 02/14 0.718 0694 0.672 0.650 0630 0.610 0.592 0.574 0.510 2 0.609 0.579 0.551 0.524 0500 0.477 0.455 0.435 0.354 3 0516 0.482 0.451 0.423 0.397 0373 0.350 0.329 0.260 4 0.437 0.402 0.370 0.341 0.315 0.291 0.269 0 250 0.186 5 0 370 0.335 0.303 0.275 0.250 0227 0.207 0.189 0.133 6 0.314 0279 0.249 0222 0.198 0.178 0.159 0.143 0.095 7 0.266 0233 0.204 0.179 0.157 0.139 0.123 0.108 0.068 8 0.225 0.194 0.167 0.144 0.125 0.094 0.082 0.048 9 0.191 0.162 0.137 0.116 0.099 0.005 0.073 0.062 0.035 10 0.162 0.135 0.112 0094 0.079 0.066 0.056 0.047 0 025 11 0.137 0.112 0.092 0076 0.062 0.052 0.043 0.036 0.018 12 0.116 0093 0.075 0.061 0050 0.040 0.033 0027 0.013 13 0 099 0078 0,062 0.049 0039 0032 0.025 0.021 0009 14 0084 0.065 0.051 0.040 0.031 0025 0.020 0.016 0.006 15 0.071 0.054 0.042 0.032 0.025 0019 0.015 0.012 0.005 16 0.060 0.045 0.034 0026 0.020 0.015 0.012 0.009 0.003 17 0051 0038 0.028 0021 0.016 0.012 0.009 0.007 0.002 18 0043 0.031 0.023 0.017 0.012 0.009 0.007 0.005 0.002 19 0.037 0.026 0.019 0.014 0.010 0007 0.005 0.004 0.001 20 0.031 0022 0015 0.011 0.000 0 006 0.004 0.003 0.001 21 0026 0.018 0.013 0009 0005 0004 0.003 0.002 0.001 22 0022 0,015 0.010 0.007 0.005 0003 0.002 0002 0 000 23 0.019 0013 0 000 0.006 0.004 0.00) 0002 0.001 0.000 24 0.016 0010 0007 0.005 0.003 0.002 0.001 0.001 0.000 25 0.014 0.000 0.006 0004 0002 0.002 0001 0.001 0.000 26 0.011 0.007 0005 0.003 0.002 0.001 0.001 0.001 0.000 27 0010 0006 0004 0.002 0.002 0001 0.001 0 000 0.000 28 0 000 0.005 0.003 0.002 0.001 0001 0.000 0.000 0.000 29 0.007 0004 0.003 0.002 0.001 0001 0 000 0.000 0.000 30 0.003 0.002 0001 0001 0 000 0.000 0.000 0.000 0.001 0.000 0001 35 0 000 0.000 0.000 0 000 0.000 0.000 0.000 10 ]