TABLE 1 Present Value of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.855 0.877 0.870 0.833 0.500 0.769 2 0.925 0.907 0.890 0.873 0.857 0.842 0.326 0.812 0.797 0.753 0.769 0.756 0.694 0.640 0.592 3 0.889 0.564 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.579 0.512 0.455 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.482 0.410 0.350 5 0.322 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.402 0.328 0.269 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.335 0.262 0.207 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.279 0.210 0.159 S 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.233 0.168 0.123 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.194 0.134 0.094 10 0.676 0.614 0.558 0.505 0.463 0.422 0.356 0.352 0.322 0.295 0.270 0.247 0.162 0.107 0.073 11 0.650 0.585 0.527 0.475 0.429 0.358 0.350 0.317 0.287 0.261 0.237 0.215 0.135 0.036 0.056 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.205 0.187 0.112 0.069 0.043 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.25% 0.229 0.204 0.182 0.163 0.093 0.055 0.033 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.151 0.160 0.141 0.078 0.044 0.025 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.065 0.035 0.020 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.185 0.163 0.141 0.123 0.107 0.054 0.028 0.015 17 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.105 0.093 0.045 0.023 0.012 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 0.081 0.038 0.018 0.009 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.033 0.070 0.031 0.014 0.007 20 0.456 0.377 0.312 0.25% 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.026 0.012 0.005 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.018 0.007 0.003 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.032 0.066 0.053 0.043 0.035 0.013 0.005 0.002 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.010 0.004 0.001 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.004 0.001 0.000 35 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.019 0.014 0.010 0.008 0.002 0.000 0.000 40 0.20 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.001 0.000 0.000 1S TABLE 2 Present Value of Annuity of $1 10 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.393 0.885 0.877 0.870 0.533 0.500 0.769 2 1.836 1.559 1.333 1.308 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.528 1.440 1.361 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.106 1.952 1.816 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.589 2.362 2.166 4.452 4.329 4.212 4.100 3.993 3.390 3.791 3.696 3.605 3.517 3.433 3.352 2.991 2.689 2.436 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 3.999 3.359 3.784 3.326 2.951 2.643 6.002 5.786 5.582 5.359 5.206 5.033 4.36S 4.712 4.564 4.423 4.288 4.160 3.605 3.161 2.802 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.96S 4.799 4.639 4.487 3.837 3.329 2.925 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.031 3.463 3.019 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5.216 5.019 4.192 3.571 3.092 8.760 5.306 7.887 7.499 7.139 6.505 6.495 6.207 5.939 5.687 5.453 5.234 4.327 3.656 3.147 9.385 3.563 3.354 7.943 7.536 7.161 6.314 6.492 6.194 5.915 5.660 5.421 4.439 3.725 3.190 9.986 9.394 8.853 .358 7.904 7.487 7.103 6.750 6.424 6.122 5.342 5.583 4.533 3.750 3.223 14 10.563 9.399 9.295 3.745 8.244 7.786 7.367 6.982 6.628 6.302 6.002 5.724 4.611 3.824 3.249 15 11.118 10.380 9.712 9.108 3.559 8.061 7.606 7.191 6.511 6.462 6.142 5.347 4.675 3.859 3.268 16 11.652 10.538 10.106 9.447 5.851 3.313 7.824 7.379 6.974 6.604 6.265 5.954 4.730 3.857 3.283 12.166 11.274 10.477 9.763 9.122 3.544 3.022 7.549 7.120 6.729 6.373 6.047 4.775 3.910 3.295 12.659 11.690 10.528 10.059 9.372 3.756 3.201 7.702 7.250 6.540 6.467 6.128 4.812 3.928 3.304 13.134 12.085 11.158 10.336 9.604 S.950 8.365 7.839 7.366 6.938 6.550 6.198 4.543 3.942 3.311 20 13.590 12.462 11.470 10.594 9.818 9.129 5.514 7.963 7.469 7.025 6.623 6.259 4.570 3.954 3.316 14.451 13.163 12.042 11.061 10.201 9.442 5.772 3.176 7.645 7.170 6.743 6.359 4.909 3.970 3.323 15.247 13.799 12.550 11.469 10.529 9.707 8.955 8.348 7.784 7.283 6.835 6.434 4.937 3.951 3.327 15.622 14.094 12.783 11.654 10.675 9.523 9.077 3.422 7.543 7.330 6.373 6.464 4.948 3.985 3.329 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 3.055 7.496 7.003 6.566 4.979 3.995 3.332 35 15.665 16.374 14.498 12.948 11.655 10.567 9.644 8.555 8.176 7.586 7.070 6.617 4.992 3.998 3.333 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 5.951 8.244 7.634 7.105 6.642 4.997 3.999 3.333 Gravina Company is planning to spend $9,500 for a machine that it will depreciate on a straight-line basis over 10 years with no salvage value. The machine will generate additional cash revenues of $1,900 a year. Gravina will incur no additional costs except for depreciation. Its income tax rate is 40%. (For parts 3 and 4 of this question use Table 1 and Table 2.) Required: 1. What is the payback period of the proposed investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) 2. What is the accounting (book) rate of return (ARR) based on the initial investment outlay? (Round your answer to 1 decimal place.) 3. What is the maximum amount that Gravina Company should invest if it desires to earn an internal rate of return (IRR) of 15%? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) 4. What is the minimum annual (pretax) cash revenue required for the project to earn a 15% internal rate of return? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 1. 6.25 years Payback period Book rate of return Maximum amount Minimum annual (pretax) S 7,629|