The Atlantic Medical Clinic can purchase a new computer system that will save $7,000 annually in billing costs. The computer system will last for nine years and have no salvage value. Click here to view Exhibit 128-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using tables. Required: What is the maximum price (ie., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic's required rate of return is: (Round your final answer to the nearest whole dollar amount.) 1. Seven percent 2. Eleven percent Maximum Price EXHIBIT 12B-1 Present Value of $1; Periods 4% 1 5% 0.962 0952 0.943 6% 2 0.925 0.907 3 0.889 0890 0.864 0.840 0.816 4 0.855 0823 0.792 0.763 0.735 5 0822 0.784 0.747 0.713 0.681 6 0.790 0.746 0.705 0.666 0.630 7 0.760 0.711 0.665 8 0.731 0.677 9 0.627 0.703 0.645 0.592 10 0.676 0.614 0358 11 0.650 0.585 0.527 0475 0.429 0.388 0.287 0.261 12 0.625 0.557 0497 0.444 0397 0.356 13 0601 0.530 0.469 0415 14 0.577 0.505 0442 0.388 15 0.555 0.481 0417 16 0.534 0.458 0.394 0.339 0.141 17 0513 0436 0.371 0.125 18 0494 0.153 0.130 19 0475 0.116 20 21 0439 0.359 0.294 22 0422 0.342 0.278 23 0406 0.326 | 0.262 24 0390 0310 0.247 25 0375 0.295 0053 0.047 26 27 28 29 30 40 22% 18% 19% 25% 21% 17% 16% 13% 14% 12% 11% 7% 9% 8% 10% 0.909 0.901 0.893 0.885 0877 0.870 0.862 0.855 0.847 0.840 0.833 0826 0.820 0813 0.806 0.800 0.935 0.926 0.917 0.718 0.756 0.743 0.731 0,706 0694 0.640 0.683 0.672 0.661 0.650 0.857 0.842 0.873 0826 0812 0.797 0.783 0.769 0537 0524 0512 0.693 0.675 0.772 0.751 0.731 0.712 0.794 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0516 0.499 0.482 0.467 0.451 0437 0423 0410 0.613 0.708 0.683 0.659 0.636 0592 0572 0.552 0534 0328 0456 0543 0.519 0497 0476 0437 0419 0.402 0386 0.370 0.355 0.341 0650 0.621 0.593 0.567 0480 0.456 0432 0410 0.390 0.370 0.352 0.335 0.319 0.303 0289 0.275 0.262 0.596 0.564 0.535 0.507 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 0.482 0452 0425 0.400 0.376 0.354 0.333 0.623 0.583 0.547 0.513 0.168 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.194 0.180 0.167 0.155 0.144 0.134 0460 0424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.544 0.500 0.149 0.137 0.126 0.116 0.107 0.227 0,191 0.208 0.270 0.247 0.176 0.162 0.508 0.463 0322 0.295 0422 0.386 0.352 0.178 0.135 0.162 0.148 0.123 0.112 0.103 0.094 0.086 0237 0.215 0350 0317 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 0.257 0.231 0.208 0.187 0.168 0.319 0.286 0.055 0.061 0.130 0.093 0.084 0.075 0.116 0.104 0.182 0.163 0.145 0.290 0.258 0.229 0.204 0.368 0.326 0.044 0.111 0.088 0.078 0.069 0.062 0.055 0.049 0.099 0.160 0.141 0.125 0.232 0.205 0.181 0340 0.299 0.263 0040 0.035 0.057 0.051 0.045 0.108 0.095 0.084 0.074 0.065 0.140 0.123 0.362 0315 0.275 0.239 0.209 0.183 0.160 0.081 0.062 0.047 0042 0.036 0.032 0.028 0.071 0.054 0.123 0.107 0.093: 0.292 0.252 0.218 0.188 0.163 0.023 0.039 0.034 0.030 0.026 0.080 0.069 0.052 0.045 0.093 0.060 0.108 0.198 0.170 0.146 0317 0.270 0.231 0038 0.032 0.028 0.024 0.021 0.018 0.095 0.081 0.069 0.059 0.051 0.044 0.111 0416 0.350 0.296 0.250 0.212 | 0.180 0.020 0.017 0.014 0.031 0.027 0023 0.043 0.037 0.098 0.277 0.232 0.194 0.164 0.138 0.083 0.070 0.060 0.051 0396 0.331 0031 0.043 0.037 0.026 0.022 0.019 0.061 0.051 0.087 0073 0.149 0.124 0.104 0.456 0377 0312 0.258 0.215 0.178 0.031 0.026 0.022 0.018 0.015 0.112 0.093 0.053 0044 0.037 0.077 0.064 0.199 0.164 0.135 0.242 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.056 0.068 0.101 0.083 0.226 0.184 0.150 0.123 0.074 0.060 0.049 0.040 0.170 0.138 0.112 0.091 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.211 0.007 0.006 0015 0.013 0.010 0.008 0.028 0023 0019 0.066 0.158 0.082 0.126 0.102 0.043 0.035 0.197 0.006 0.005 0.016 0.013 0.010 0.009 0.007 0.038 0.030 0.024 0.020 0.146 0.233 0.184 0.116 0.092 0.074 0.059 0.007 0.006 0.005 0.004 0.009 0.026 0021 0017 0014 0011 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.004 0.003 0.009 0.007 0.006 0.005 0.037 0.029 0.023 0.018 0.014 0.011 0347 0.268 0.207 0.161 0.125 0.098 0076 0.060 0.047 0.006 0.005 0.004 0.003 0.002 0054 0.042 0.333 0.255 0.150 0.116 0.090 0.069 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.196 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.029 0.022 0.017 0.014 0.011 0.107 0321 0.243 0.185 0.141 0.082 0.063 0.048 0037 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0015 0012 0.009 0044 0.033 0.026 0.020 0.174 0.131 0.099 0.075 0.057 0.308 0.231 0.000 0.000 0.000 0.000 0.008 0.005 0.011 0.001 0.001 0.001 0.004 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 15% 20% 23% 24% 0.195 0.152 0.068 0.016 0.014 0.012 0.013 0.011 0.009 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0001 0.003 0.002 0.000 EXHIBIT 128-2 Present Value of an Annuity of $1 in Arrears; 1/(1-(1/(1+r)^n)) 12% 13% 1.690 2.402 0.893 0.885 1.668 14% 15% 16% 0.877 0.870 0.862 17% 18% 19% 20% 21% 22% 0.855 0.847 0.840 0.833 0.826 0.820 23% 24% 25% 0.813 0.806 0.800 1474 1457 1440 65 7% 8% 9% 10% 11% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 1886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.647 1.626 1.605 1585 1566 1547 1528 1509 1492 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1981 1952 3.630 3.546) 3465 3.387 3.312 3.240 3.170 3.102 3037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2.448 2.404 2.362 4.452 4.329 4212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991 2.926 2864 2.803 2.745 2.689 5.242 5076 4.917 4.767 4.623 4.486 4.355 4214 4.111 3.998 3889 3.784 3.685 3.589 3.498 3.410 3.326 3245 3.167 3.092 3020 2.951 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4487 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3.518 3421 3329 6315 6.247 5.995 5.759 5537 5.328 5.132 4.946 4.772 4607 4451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3463 8.111 7.722 7360 7.024 6.710 6418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4054 3.923 3.799 3.682 3.571 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6492 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4439 4.278 4.127 3.985 3.851 3.725 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780 10.563 9.899 9.295 8.745 8.244 7,786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008) 4.302 4.611 4432 4.265 4.108 3962 3.824 11.118 10.380 9.712 9.108 8.559 8.061 7.606 7.191 6.811 6.462 6.142 5.847 5.575 5.324 5.092 4876 4.675 4489 4.315 4.153 4.001 3.859 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 4.189 4033 3887 12.166 11.274 10477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6.047 5.749 5475 5.222 4.990 4.775 4.576 4.391 4219 4.059 3.910 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7250 6.840 6.467 6.128 5.818 5534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928 13.134 12.085 11.158 10.336 9.604 8.950 7.839 7.366 6938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4.442 4.263 4.097 3.942 13.590 12.462 11.470 10.594 9818 9.129 8.514 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.353 5.101 4.870 4657 4.460 4.279 4.110 3.954 14.029 12 821 11.764 10.836 10.017 9.292 8.649 8.075 7.562 7.102 6.687 6312 5973 5.665 5.384 5.127 4.891 4.675 4476 4.292 4,121 3.963 14.451 13.163 12.042 11.061 10.201 | 9442 7,645 7.170 6.743 6.359 6011 5.696 5410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 12.303 | 11.272 10.371 9580 7.718 7.230 6.792 6.399 6.044 5.723 5432 5.167 4.925 4.703 4.499 4.311 4.137 3.976 15.247 13.799 12.550 11.469 10.529 9.707 7.784 7.283 6.835 6434 6073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 15.622 14.094 12.783 11.654 10.675 9.823 7.843 7.330 6.873 6.464 6.097 5.766 5.467 5.195 4.948 4.721 4514 4.323 4.147 3.985 15.983 14.375 13.003 11 826 10.810 9.929 9.161 8.488 7.896 7372 6.906 6.491 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7409 6.935 6514 6.136 5.798 5.492 5.215 4964 4.734 4.524 4.332 4.154 3.990 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4528 4.335 4.157 3.992 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4,159 3.994 17.292 15.372 13.765 12.409 11.258 10.274 9427 8.694 7496 7.003 6.566 6.177 5829 5.517 5.235 4.979 4.746 4.534 4339 4.160 3.995 7.634 7.105 6.642 6.233 5871 5.548 5.258 4.997 4.760 4.544 4347 4.166 3.999 Periods 4 5% 1 2 3 4 5 6 7 6.002 5.786 5.582 8 6.733 6.463 6.210 9 7.435 7.108 6.802 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 8.055 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8951 8.244 8.365 8.772 8.176 8.883 8.266 8.985 8.348 9.077 8.422