Table 2 - Present Value of an ordinary Annuity of $1 at Compound Interest Period 5% 6% 7% 8% 9% 10% 11% 12% 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 2.723 2.673 2.624 2.577 2.531 2.487 - 2.444 2.402 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 5.076 4.917 4.767 4.62 4.486 4.355 4.231 4.111 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 8.863 8.384 7.943 7.536 7.161 6.814 6.492 6.194 9.394 8.853 7.904 7.487 7.103 6.750 6.424 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 10.380 9.712 9.108 8.5598.061 7.606 7.191 6.811 10.838 10.106 9.447 8.851 8.313 7.824 7.3796.974 11.274 10.477 9.763 9.122 8.544 8.022 7.5497.120 8.358 Pre Check My Work 6.8 6.974 10.3809712 10.838 10.106 11.274 10.477 11.690 10.828 12.085 11.158 12.462 11.470 9103 3.559 3.5598.061 9.447 8.851 8.313 9.763 9.122 8.544 10.0599.372 8.756 10.336 9.604 8.950 10.594 9.818 9.129 74606 7091 7.824 7.379 8.022 7.549 8.201 7.702 8.365, 7.839 8.514 7.963 7.250 7.366 7.469 20 Using the previous table, enter the correct factor for three periods at 5% - Present value Periodic payment X Factor $6,000 * 2.723 $16,338 The controller at Ringer has determined that the company could save $4,000 per year in engineering costs by purchasing a new machine. The new machine would last 10 years and provide the aforementioned annual monetary benefit throughout its entire life. Assuming the interest rate at which Ringer purchases this type of machinery is 10%, what is the maximum amount the company should pay for the machine? X (Hint: This is basically a present value of an ordinary annuity problem as highlighted above.) Assume that the actual cost of the machine is $18,000. Weighing the present value of the benefits against the cost of the machine, should Ringer purchase this piece of machinery? Yes Feedback Feedback Previous Check My Work All work saved. Email Instructor Save and Exit Submit Assignment for Gradin