The Elberta Fruit Farm of Ontario always has hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, Just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic torps that funnel the cherries into bins, Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $210,000 per year to transient workers to pick the cherries b. The cherry picker would cost $600,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10-year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be cost of an operator and an assistant, $86,000, insurance, $5,000; fuel, $13,000; and a maintenance contract. $16,000. Click here to view Exhibit 78:1 and Exhibit 7B:2. to determine the appropriate discount factor using tables Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased Elberta Fruit Farm's required rate of return is 11%? 3a. Compute the payback period on the cherry picker 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of seven years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker, 4b. Based on this computation does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Rea 1 Red 2A Reg 28 RegJA Reg 38 Reg 4 Reg 43 ezto-cf-media.meducation.com EXHIBIT 70-1 Present Value of St: F 55 11% 6% 17% Periods 4% 6% 78 8% 98% 109 12% 13% 149 0962 0952 093 0935 0926 0917 0.909 0.901 0893 0885 0877 0.870 0862 0855 0.847 0840 0833 0826 0820 08130806 0800 15% 1 189 198 208 21 22 23 24% 25% 2 0.925 0.907 0890 0.873 0857 0.842 0.826 0812 0797 0783 0769 0.756 0743 0731 0.718 0706 0.694 0683 0672 0.661 0650 0540 3 0889 0.864 0840 0.816 0794 0772 0.751 0731 0712 0693 0675 0658 0641 0624 06090593 0579 0564 0551 0537 0.524 0512 4 0.855 0823 0.792 0763 0735 0708 0683 0659 0636 0613 0.592 0572 0552 0534 0516 0.499 0.482 0.467 0451 0437 0423 0410 5 0.822 0784 0.747 0713 0681 0650 0.621 0593 0567 0543 0.519 0497 0.476 0456 0437 0419 0.402 0.386 0370 0355 0.341 0328 6 0 790 0.746 0.705 0666 0.630 0596 0564 0.535 0.507 0480 0456 0432 04100390 0370 0352 0335 0319 0303 0289 0275 0262 7 0760 0.711 0.665 0623 0.583 0547 0513 0482 0.452 0425 0400 0376 0354 0.333 034 0296 0279 0263 0.2490235 0222 0210 0.731 0677 0627 0582 0.540 0.502 0.467 0.434 0.404 0376 0351 0327 0.305 0285 0266 0249 0233 0218 0.2040191 01290158 9 0703 06450592 0544 0500 0 460 04240391 0361 0333 0308 0.284 0263 0243 0225 02090194 0.1800167 0155 0144 034 10 0676 0.614 0558 0508 0.463 0422 0 386 0352 0322 0295 0270 0.247 0227 0.208 0191 0176 0.162 019 0137 0126 0116 0302 11 0.650 0585 0527 0.475 0.429 0388 0350 037 0.287 0.261 0237 0215 0195 0178 0162 0148 0135012301120103 00940085 12 0.625 0557 0497 444 0.397 0356 0319 0286 0257 0221 0208 0187 0168 0152 0137 0124 0112 0102 0097 003 0076 009 13 0601 0530 0469 0415 0368 0.326 0290 0258 0229 0204 0182 0163 0145 0130 0.116 0.104 0093 0.084 0075. 0068 000055 14 0.577 0.505 0442 0.388 0340 0.299 0263 0232 0205 0181 01600141 0125 0111 0099 0.068 007 0069 0062 0055 00490044 15 0555 0.481 0.412 0.362 0315 0.275 0.239 0209 0183 016001400123 0986095 0.04 0.074 0065 0.057 00510045 0.0400035 16 0.534 0458 0.394 0339 0292 0252 0218 0188 0163 0141 0123 0907 0093 0.081 0.071 0.052 0054 0.07 0042 0.035 0.032 0.078 0:513 0.436 0371 03170 270 0231 0198 0170 016 0125 0108 0093 0.080 0.06 0.050 052 0045 0039 0034 00300026002 18 0494 0.4160350 0.296 0.250 0212 01800153 01300111 0.095 0081 0069 0059 0051009 0.038 00320028 0.0240021005 19 0475 0.396 0331 0277 0232 0.194 0164 0138 0115 0098 0.083 000 0060 0,051 0043 0.037 003 0027 0023 020 0012 0014 20 0.456 0377 0312 0258 02150178 0.149 0124 01040087 0073 0061 0051 0043 0037 0.031 0026 0022 0.019 0076 004 0012 21 04390359 0294 0242 0199 0164 013501120093 007 0064 0.053 0044 0.02 0.021 0026 0022 0.018 005 00130 0.009 22 0.422 0.342 0278 0226 0.184 015001230901 0083 0068 0056 0046 0038 0.002 0.006 0022 0018 00153 000 000 000 000 23 0406 0.326 0252 02110170 0138 011200910074 0060 0049 0040 0033 027 02 018 0015 0012 000 000 000 0006 24 0390 03100247 0197 0158 0126 0102 0.082 0.066 0053 0043 0035 0028 019 005 003 000 000 000 0005 0,005 0375 0295 0233 0184 016 01160092-0074 0059 0047 0038 0.0300021 000 0016 03 00100009 007 0006 0.005 000 26 0361 0281 0220 0172 01350106 0084 0066 0.053 00420033 0.026 002 017 OM 001 000 000 000 0005 0000 000 0347 0.268 0207 0161 0125 0098 00760060 0.047 0037 0029 002 010 01 0009 007 0000 0005 004 0002 0002 28 0.333 0255 0.196 0150 0116 0090 0069 0054 0042 0033 0026 0020 000 2 000 000 000 0005 0000 0000 0002 0017 0321 02430185 01410.807 002 0063 0018 0037 0029 0022 0 0 0 000006 00S 0004H00 002 0002 0.002 OBOK 0231 0174 013100990075 0057 0044 6033 0626 0020 019 0012 000 000 0005 004 00 0.003 0.002 0.007 000 40 2080102 0097 00046 00220022 0015 0:011 ODOR900500000000000000000000000000 201 2531 4767 Periods 4% 5% 6% 8% 9% 10% 12% 1 0.962 0.952 0.943 0.935 0.926 0.917 B 15% 16% 1235 18 194 0909 0 901 0893 0.885 0877 0.870 0862 0.855 0847 0840 0833 0826 0820 0813 0806 0800 215 22 23 24% 253 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1555 1547 1528 15091492 1474 1451 140 3 2775 2723 2673 2624 2577 2487 2444 2402 2351 2322 2283 2246 2210 274 210 2105 2074 2042 2011 1981 1952 4 3630 3546 3.465 3387 3.312 3.240 3170 3102 3037 2974 2914 2856 2798 273 2690 2539 2589 2540 2494 2448 2404 2362 5 4.452 4329 4.212 4.100 3.993 3.890 3.791 3.696 3605 3517 3433 3352 3274 3199 3127 3058 2991 2926 2864 2803 2745 2689 6 5242 5076 4917 4623 4486 4355 4 231 4111 3.998 3.889 3784 3685 3.589 3.498 3.490 3326 3245 3 157 3092 3020 2951 7 6.002 5786 5.582 5389 5206 5.033 4868 4712 4564 4423 4288 4160 4039 3922 3812 37063605 3508 2416 3327 3242 3161 6733 6 463 6.210 5971 5747 5535 5375 5146 4 968 4799 4639 4487 4344 4207 4078 3954 3837 3726 3.619 3518 3421 3329 9 7435 7108 6 802 6515 6 247 5995 5759 5537 5328 5132 4946 4712 4607 4451 4303 4163 4031 3905 3786673 356 3463 10 8.111 PPT 7360 7024 6710 6.418 6145 5889 5.650 5426 5215 5.019 4833 4659 4494 43394192 4054 3923 3799 3682 3571 11 8.750 8306 7887 7499 71396.8 6.495 6207 5938 5687 5453 5234 5029 48364656 4:485 4327 417 4035 3902 37762656 12 9385 8.863 8384 7943 7536 7161 6.814 6.492 6194 5918 5.660 5421 5197 4988 47934611 4439 4278 473985 3851 3725 13 9.986 9394 8.853 8.358 7904 7.487 7103 6750 6.424 6122 5842 5.583 5 342 5.118 4910 4715 4533 4362 4203 405329123780 14 10 563 9.899 9.295 8.745 8244 2786 7367 6.982 6,628 6302 6002 57244 5.468 5229 5008 4802 4511 4.132 255 408 3962 3874 15 11118 10 380 9712 9108 8.559 8061 7606 7191 6811 6.462 6142 5847 5575 5.324 5.092 4875 4575 4489 4315 458 4001 3859 16 11652 10838 10.106 9447 8851 8313 7824 7379 5974 5604 6265 5954 5658 5405 5162 4908 47304536 4357 41894033887 17 12.166 11 274 10477 9763 9122 8544 8022 7549 7120 6729 6373 6.047 5749 5475 5222 4990 4775 4576 4391 4219053910 18 12659 11690 10 828 10.0599372 8756 8201 7702 7250 68406 467 5128 5.818 5 534 5213 5033 48124608 419 420 40803928 19 1134 2085 11158 10336 9.604 8950836578297366 6938 6550 6198 5877 5594 5316 5070 443 4635 442 42634097342 20 13.590 1245211470 10 594 9818 9129 8547963 7469 7025 6673 6259 599 5628 5353 6014870 4657 4450 290 354 21 14029 12821 11754 10836 10.017 9292 8 649 8075 756221026687 6312 5.973 5665 5.384 5:127 4897 4675 42924121963 22 14.451 13.163 042 11061 10 201 9442 8772 8176 7645 7170 6.743 6358 601 5696 5410 5149 4908 46904 402 40303970 23 14857 13.489 12 303 1127210371 9580 8 883 82667718 7230 6.792 6199 504 572315432 5:167 4925 473 44994211 433.925 24 15 247 13799 12.550 1146980529 9.707 8.985 8348 7784 7283 6835 6434 6.073 105651 StR2 4937 4.73 507 343981 15622 14 0942.783 1654 10.675 9.823 9.077842278437330 5873 6464 097 5766 547 51954948 4721 514 4223473.98 26 1598314 375 3003 11826 10.810 9929 9.161 8488 78967312 6 906 64 1995 50 5206 49564728 4521328415 88 16 330 14643 13.211 11987 1935 10021 973785487943 7409 6935 65 64 5492 525 496447345240 44153 9 307 8602 7984 7441 6961 6534 6152 1666 14.898 13 406 12137 1105110116 5 AUD 57 5.1 34 18.15 1997 2294925 474 4531 437 59 29 95 94 151 13591 12278 11158 10198 9370 8650 8022 746 655 165 205/5 30 17292 15372 765 12 409 41258 10 274 9 427 8694 8055 7496700865666 551/ 215 499 745 A544409995 9793 1735415046 1332 11925 1075797798951 8244 7634 7105 662 255 256 290/454434/4299 27 MacBook Air