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Table 6-4: Factors for Calculating the Present Value of $1 Table 6.5: Factors for Calculating the Present Value of an Annuity of $1 Exercise 16-25

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Table 6-4: Factors for Calculating the Present Value of $1 Table 6.5: Factors for Calculating the Present Value of an Annuity of $1 Exercise 16-25 (Algo) Calculate NPV-compare to IRR LO 16-7 Southem Manufactuting Limited is considering the investment of $90,000 in a new machine. The machine wil generate cash flow of $13,000 per year for each year of its eleven-year life and whl have a savoge value or $5,000 at the end of its life. The company's cost of capital is 12%. Table 5.4 and Note: Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals. Required: a. Caiculate the net present value of the proposed investvent (ignore income taxes. b. What will the internal rate of retum on this investment be relative to the cost of capital? Complete this question by entering your answers in the tabs below. Calculate the net present value of the proposed investment. (Ignore income taxes.) Note: Negative amount should be indicated by a minus sigr

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