The following information is to be used for Question 8 and 9 below (SHOW ALL WORK) The manager of Shuttle Meadow Company, a wholesale distributor of suntan products, is considering the purchase of a $136,920 machine that would reduce operating costs by $30,000 per year. At the end of the machine's 7-year useful life, it will have no scrap value 8) Calculate the internal Rate of Return on this project. Use this table below: APPENDIX TABLE Annuity table: Present value of $1 per year for each of t years-1/r-1/(1) Interest Rate per Year Number Of Years 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 990 .980 .971 .962 .952 .943 .935 .926 .917 .909 .901 .893 .885 .877 .870 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 .690 .668 1.647 .626 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.0372.974 2.914 2.855 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.2314 3.998 3.889 3.784 6.728 6,472 6.230 6.002 5.7865.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4.487 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.7595.5375.328 5.132 4.946 4.772 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5.216 5.019 10 9) Calculate the Net Present Value of this project using the information from 7 above and adding this additional information. The equipment will have a salvage value of $20,000 at the end of7 years. The Company changed the Required Rate of Return to 14%. You will need this table along with the table above APPENDIX TABLE 1 Discount factors: Present value of $1 to be received after t years-1/1)t Interest Rate per Year Number Of Years 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% .990 .980 971 962 .952 943 .935 .926 .917 .909 .901 .893 885 877 .870 980 961 .943 925 907 890 873 857 842 826 812 .797 .783 769 756 971 .942 915 889 864 840 816 794 772 75 73712693 675 658 .961 .924 888 855 .823 792 .763 .735 .708 .683 .659 .636 .613 .592 .572 951 906 863 822 784 747 713 681 650 621 593 567 543 519497 942 888 837 790 746 705 666 630 596 564 535 507 480 456 432 933 871 813.76071 665 623 .583 547 513 482452425 400 376 923 853 .789 .731 677 627 .582 .540 502 467 434404 .376 .351 .327 914 837.766 .703 645 592 544 500 460 42439 36333 308 284 905 820 744 676 614 .558 .508 463 422 .386 352 322 295 270 247 10 Net Present Value: Should Shuttle Meadow buy the Equipment
