The management of Kunkel Company is considering the purchase of a $40,000 machine that would reduce operating costs by $9,500 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of return is 13%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Required: 1. Determine the net present value of the investment in the machine. 2. What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? EXHIBIT 12B-1 Present Value of Sl: 1 (1+rn 11% 16% 0.797 0.516 0.499 0.507 0.205 Periods 1 2 3 4 5 6 7 3 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 4% 5% 6% 7% 8% 9% 10% 12% 13% 14% 15% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 | 0.813 0.806 0.800 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.694 0.683 0.672 0.661 0.650 0.640 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.482 0.467 0.451 0.437 0.423 0.410 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.328 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.319 0.303 0.2890.275 0.262 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 0.703 0.6450.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 | 0.065 0.057 0.051 0.045 0.040 0.035 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 0.456 0.377 | 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 | 0.014 0.012 0.439 0.359 0.294 0.2420.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 | 0.013 0.011 0.009 0.007 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 0.390 0.310 0.247 0.197 0.158 0.126 0.1020.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 | 0.013 | 0.010 | 0.008 0.007 0.006 0.005 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 | 0.016 0.013 0.010 0.00 0.007 0.006 0.005 0.004 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 | 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.333 0.255 0.1960.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 | 0.0160.0120.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.0110.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 | 0.012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.0110.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears: 1/r(1-(1/(1+r)^n)) Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 0.962 22% 24% 0.952 23% 25% 0.943 0.935 0.926 0.917 | 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 | 0.826 0.820 0.813 0.806 1.886 1.859 0.800 1.833 1.808 1.783 1.759 1.736 | 1.713 1.690 1.668 1.647 1.626 1.605 1.585 | 1.566 1.5471.528 1.509 2.775 1.492 | 1.474 2.723 1.457 | 1.440 2.673 2.624 2.577 2.531 2.487 2.444 | 2.402 2.361 2.322 2.283 2.246 2.210 | 2.174 | 2.140 2.106 2.074 3.630 2.042 1.981 3.546 2.011 3.465 3.387 1.952 3.312 3.240 3.170 3.102 3.037 2.974 | 2.914 2.855 2.798 | 2.743 2.690 2.639 4.452 2.589 2.540 2.494 2.448 4.329 2.404 2.362 4.212 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 2.864 5.2425.076 2.803 2.745 2.689 4.917 4.767 4.623 4.486 4.355 4.231 4.111 3.9983.889 3.784 3.685 3.589 3.498 3.410 6.002 3.326 3.245 3.167 5.786 5.582 3.092 3.020 | 2.951 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 6.733 6.463 3.242 6.210 5.971 5.747 3.161 5.535 5.335 5.146 | 4.968 4.799 4.639 | 4.487 4.344 4.207 4.078 3.954 3.837 7.435 3.726 3.619 7.108 6.802 6.515 6.247 3.518 3.421 3.329 5.9955.759 5.537 5.328 5.132 4.9464.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 8.760 8.306 3.923 3.799 3.682 3.571 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 5.4535.234 5.029 4.836 4.656 4.486 4.327 4.177 4.035 9.385 3.902 8.863 8.384 7.943 3.776 3.656 7.536 7.161 | 6.814 6.492 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4.439 9.986 4.278 9.394 4.127 3.985 8.853 8.358 3.851 3.725 7.904 7.487 7.103 6.750 6.424 6.122 5.8425.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 10.563 9.899 4.053 3.912 8.745 3.780 9.295 8.244 7.786 7.3676.982 6.628 6.302 6.0025.724 5.468 5.229 5.008 4.802 4.611 4.432 11.118 10.380 | 9.712 4.265 4.108 3.962 9.108 8.559 3.824 8.061 7.606 7.191 6.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 11.652 10.838 10.106 4.315 4.153 9.447 4.001 3.859 8.851 8.313 7.824 7.379 6.9746.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 12.166 | 11.274 10.477 | 9.763 9.122 4.189 4.033 3.88 8.544 8.022 7.549 7.120 6.7296.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 12.659 11.690 10.828 10.059 9.372 4.059 3.910 8.7568.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 4.608 13.134 12.085 11.158 10.336 9.604 4.419 4.243 4.080 3.928 8.950 8.365 7.839 7.366 | 6.938 6.550 6.198 5.8775.584 5.316 5.070 4.843 4.635 13.590 12.462 11.470 10.594 | 9.818 4.442 | 4.263 4.097 3.942 9.129 8.514 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.3535.101 4.870 4.657 4.460 4.279 4.110 14.029 12.821 | 11.764 10.836 10.017 | 9.292 3.954 8.649 8.075 7.562 7.1026.687 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4.476 14.451 | 13.163 12.042 | 11.061 10.201 4.292 4.121 3.963 9.442 8.7728.176 7.645 7.170 6.743 6.359 6.011 | 5.696 5.410 5.149 4.909 4.690 14.857 13.489 12.303 11.272 10.371 4.488 4.302 4.130 3.970 9.580 8.883 | 8.266 7.718 7.230 6.792 6.399 6.044 5.723 5.432 5.167 4.925 4.703 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 4.499 4.311 4.137 3.976 7.784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 15.622 14.094 12.783 11.654 10.675 9.8239.077 8.422 4.143 3.981 7.843 7.330 6.873 6.464 6.097 5.7665.467 5.195 4.9484.721 15.983 14.375 | 13.003 11.826 10.810 | 9.929 | 9.161 4.514 4.323 4.147 3.985 8.488 7.896 7.372 6.906 6.491 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4.328 16.330 14.643 13.211 11.987 10.935 10.027 | 9.237 4.151 3.988 8.548 7.943 7.409 6.935 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.154 16.663 14.898 13.406 12.13711.051 10.116 | 9.307 8.602 3.990 7.984 7.441 | 6.961 6.534 6.152 5.810 5.5025.223 4.970 4.739 4.528 4.335 4.157 16.984 15.141 | 13.591 | 12.278 11.158 10.1989.370 8.650 3.992 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 17.292 15.372 13.765 | 12.409 11.258 10.274 | 9.4278.694 4.531 4.337 4.159 3.994 8.055 7.496 | 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 19.793 17.159 15.046 13.332 11.925 10.757 | 9.779 4.534 4.339 4.160 3.995 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 Determine the net present value of the investment in the machine. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount. Use the appropriate table to determine the discount factor(s).) Net present value What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? (Any cash outflows should be indicated by a minus sign.) Total difference in undiscounted cash inflows and outflows