The management of Iroquois National Bank is considering an investment in automatic teller machines. The machines would cost $163,300 and have a useful life of seven years. The banks controller has estimated that the automatic teller machines will save the bank $35,500 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Exercise 16-36 Part 2

2.

Compute the net present value of the proposed investment assuming an after-tax hurdle rate of: (a) 10 percent, (b) 12 percent, and (c) 14 percent. (Negative amounts should be indicated by a minus sign. Round your final answers to the nearest dollar amount.)

		Net Present Value
(a)	10 percent
(b)	12 percent
(c)	14 percent