The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 8 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is $403,414. To the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (Ignore income taxes.)

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.

Exhibit 14B-1 Table:

Exhibit 14B-2 Table:

Multiple Choice

• $48,410

• $50,427

• $81,202

• $403,414

EXHIBIT 14B-1 Present Value of $1; 1 (1+r)n Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 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 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0,683 0.672 0.661 0.661 0.650 0.650 0.640 3 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 OS 0.SS1 0.537 0.524 0.512 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 534 0.534 0.499 C 0.516 000 0.482 0.467 02 5 0.451 0.437 0784 0.822 0.423 0.410 0.784 0.747 0.713 502 0.681 0.650 0.621 0.593 0.567 543 0.543 0.5190.497 02 0.476 0.456 0422 0400 0 206 0.437 6 200 026 0.419 0.386 CEC 0.402 6 0.370 0.355 0.341 0.328 0620 0.720 0.705 0.746 0.666 525 0.630 506 0.596 0.564 0.535 507 49 0.507 0.480 0.456 0.432 0.410 0.390 0270 0.370 0.25 0.225 0210 0.335 7. 0.352 070 0.319 0.303 0.289 0.275 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 0210 0.210 8 0.731 0.677 o 0.627 0.582 0.584 0.540 0.502 0.467 0434 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0219 0.204 0.218 0.191 0.179 9 U.233 0.168 0.703 0.645 0.592 0.544 0.500 V. 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.203 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 10 0.676 0.614 0.558 0.508 V. 1.40) 0.463 0.422 Wao 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 11 0.107 0.650 1 W17 0.585 0.22 0.475 0.429 0.527 V.2 1.472 1.429 0.388 0.00 0.350 (261 0.317 0.287 U.201 0215 0.237 0.142 0.213 0.178 V.22 0.162 V.170 0.148 0.135 0.123 12 0.112 V.170 V.133 0.103 0.094 0.086 0.625 0.497 14 0.557 W.114 0.444 VIS 0.77 0.397 V.??? 0.356 V. 0.319 | 0.286 0227 V. 0.231 0.208 0.187 0.101 0.168 0.152 0.137 Vivo V.100 0.112 0.124 0.102 13 0.092 0.083 0.469 0.601 0.530 V.12 0.076 0.069 0.368 V.114 WAR! 0.415 0.258 retary 10 V.022 0.290 0.326 (1.204 Valbo 0.229 Waa2 Valero 0.182 0.163 0.145 0,130 0.116 0.084 Sate W. 0.104 0,093 0.068 14 Wande 0.577 0.505 Walter W. 0.442 0.075 0.061 Walan 0.340 0.388 0.299 0.055 Want V.Uz Willon Wino 0.0 0.232 0.205 WA 0.263 0.181 no 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 15 0.555 0.481 0.417 WA 0.362 0.315 0.275 0.209 0.239 V70 Wand 0.183 *** 0.160 0.140 0.123 War 0.108 0.095 0.084 Vivo wewe 0.074 0.065 Vilty 0.057 0.051 Vila 16 0.534 0.458 0.051 0.045 0.040 0.394 0.035 0.339 0.292 0.252 VVV 0.218 0.188 0.163 0.141 V.31 0.04 Sider hero 0.123 See ve 0.107 Valoo 0.093 Site 0,081 0.071 | 0.062 . 0,054 17 0.047 0.042 0.036 0.032 Nale 0.513 0.436 0.028 . Jan 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 Vidare 0.093 ted 0.080 | 0.069 ad 1 0.060 0.052 an 0.045 water- 0.039 18 0.034 | 0.030 0.026 0.023 0.494 0.350 0.416 0.296 0.250 0.212 1 0.180 0.153 0.130 0.111 00 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 word 19 0.475 0.396 0.331 0.277 0.232 0.138 0.194 0.164 With oc Viena 0.116 0.098 Salvo 0.083 0.060 D. 0.070 094 1 0.051 0,043 0.031 0,027 20 0.037 Will 0.456 0.377 0.023 0.020 Wordbok 0.312 0.258 0.215 or 0.017 0.178 0.014 del? de! 0.149 0.124 0.104 0.087 e TI Www 0.073 0.061 0.051 0.043 0.037 2012 0.031 0.026 0.022 0.019 21 0.016 0.439 0.359 w 0.359 0.294 0.014 0.012 an 0.242 TI 0.199 Vie 0.164 0.135 0.077 V.2.10.12 und 0.112 0.093 Vinte 0.044 0.037 0.064 0.053 Saw 0.031 0.022 0,018 0.026 22 out 0.015 0.013 0.422 0.342 0.278 0.011 *** 0.226 0.184 0.009 ta 0.123 or two W1240* 0.150 0.068 0.101 We Worce www 0.083 0.056 0.046 V. Since 0.038 0.032 V.00 0.026 0.018 0.015 0.022 0.013 0.011 23 0.009 0.007 Www 0.406 0.326 0.262 0.211 0.170 0.138 os 0.112 0.091 Word 0.060 0.049 0.040 word 0.074 0.033 0.027 w on w na 0.022 0.018 24 104 foto 24 100 0.015 0.0120.010 0.009 0.007 aca 0.390 0.310 0.247 *** 0.197 0.158 0.0/)6 0.126 0.102 0.1020.082 2004 0.066 * 0.053 0.043 0.035 ca 0.028 0798 2014 0.023 00 0.019 0.015 00 0.013 20 0.010 0.008 od 2012 0.008 0.007 0.006 25 0.005 0.233 0.375 0.295 000 0.184 0.146 04 0.116 0.092 0.074 0.059 0.047 au 0.038 10 0.030 0.024 0.020 0.0160.013 0.010 0.009 0.007 0.007 0.006 0.005 0.004 26 0.361 0.281 1.20 0.220 0.106 U. 0.084 WA00 0.066 0.053 0.042 0.033 0.026 0.021 0.017 Wapila Walt W.12! 0.014 MA 0.009 0.011 0.007 0.0016 0.005 0.004 27 0.0/13 0.347 0.268 0.207 0.161 Wilko 0.125 0.098 0.076 0.060 0.113 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 28 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.0200.016 0,012 0,010 | 0.008 0.006 0.005 0.004 0.003 0.002 0.002 29 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 0.011 0.008 0.006 0.005 0.0014 0.003 0.002 0.002 0.0/12 30 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 40 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 0.000 0.000 0.172 0.135 EXHIBIT 14B-2 Present Value of an Annuity of $1 in Arrears; 1 r[1-1(1+r)n] 5.389 Periods 4% 4 5% 6% 7% 8% 9% % 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% % 21% 22% 23% 24% 25% 1 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 2 1.886 1.859 0.033 1.833 1.0.2 1.808 1.783 1.783 1.759 1.736 1.690 1.713 1.668 1.647 1.30 1.070 1.626 1.605 1.585 1.547 1.566 1.0.3 1.528 1.509 1.492 1.474 3 1.457 1.440 1.41 | 1.32 2.775 2.723 2.673 2:11 2.577 2:123 1.194 1. 2.531 2.624 2012 1.474 2.444 2.024 2.487 212 2.444 2.322 2.402 2.301 2.361 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2,042 2011 1.981 4 3.630 3.546 1.952 3.465 al 3.387 3,312 3.240 3.170 3.102 1072 3.037 2.974 11201 done 1.24 2.914 2.855 102 an 4171 2.798 2.743 2.690 2.639 Sala 2.589 2.540 5 ! 2.404 2.494 | 2.448 2.362 4.452 Star 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 Site 3.433 3.352 3.274 3.517 101 3.1993.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 6 5.242 5,076 4.917 4.767 4.623 ute 4.486 4.355 4.231 4.111 3.998 3.889 3.784 3.685 3.589 ed 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951 7 6.002 5.786 5.786 5582 5.206 5.033 ko 4.868 4.712 4.7124.564 4.423 mo 4.288 4.1604.039 3.922 14 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 8 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 an 3.954 3.837 3.726 3.619 3.518 3.421 3.329 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 arre 4.031 3.905 3,786 3.673 3.566 11 10 8.111 | 7.722 3.463 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 102 5.216 5.019 4.833 4.659 4.494 4.3394.192 4.054 3.923 3.799 3.682 3.571 11 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 S.453 ad 5.029 5.234 Dora 4.836 4.656 4.486 4.327 4.177 4,035 3.902 3.776 3.656 12 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.492 6.194 5.918 5.660 5.421 5.197 12 4.611 4.988 4.793 noc 0204 4.439 4.278 4.127 3.985 3.851 13 3.725 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5.8425.583 5.342 5.118 4.910 1 4.715 4.533 4.533 4.3624.203 4.053 3.912 3.780 075 14 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 5.2295.008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 15 11.118 10.380 9.712 9.108 8.559 6.4 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 4.315 4.153 A 215 4.001 3.859 16 11.652 10.838 10.106 9.447 8.851 8.313 7824 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 A 190 4.189 4.033 3.887 17 12.166 | 11.274 10.477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 18 3.910 12.659 | 11.690 10.059 9.372 10.828 8.756 8.201 7.702 7.250 6.840 6.40/ 6.128 5.818 5.534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928 19 13.134 12.085 11.158 10.336 9.604 8.950 0.03 8.365 7.839 7.366 6.938 6.550 6.190 5.877 5.584 5.10 5.070 4.843 4.635 4.442 4.263 4.097 3.942 20 13.590 | 12.462 | 11.470 10.594 | 9.818 9.129 8.514 7.963 7.469 7.023 7,025 6.022 6.2 3.929 5.929 5.628 5.353 | 5.101 4.870 4.657 4.460 4.279 4.110 21 3.954 21 14.029 12.821 11.764 10.836 10.017 | 9.292 8.649 8.075 7.102 7.562 6.687 DVD 6.312 5.665 102 5.973 102 We 22 21 4,891 5.384 5.127 4.675 4.476 4.292 AND 4.121 14.451 13.163 12.042 11.061 10.2019.442 8.772 3.963 8.176 7.07 12 6.743 * 7374 AXI 7.170 7.645 """ 6.359 6.011 Wir wire 5.696 5.410 5.149 4.909 4.690 4.488 23 4.302 4.130 3.970 Tam 14.857 | 13.489 12.303 11.272 10.371 | 9.580 8.266 8.883 7.718 Tidla Tiba 6.792 6.399 6.044 Time 7.230 2.219 View 5.723 5.432 5.167 4.925 4.703 4,499 4.311 4.137 24 3.976 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.3487.784 7.283 6.835 6.434 6.4346.073 6.073 5.746 5.451 Z10 5.182 | 4.937 4.713 -- 4.507 4.318 4.143 3.981 25 15.622 14.094 12.783 11.654 10.675 | 9.823 9.077 WAAR 8.422 7.843 7.330 6.8736.464 6.097 5.766 5.467 5.1954.948 4299 4.721 4.514 4.323 4.147 26 und 3.985 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8.488 7.896 7.372 6.906 6.491 6.118 5.783 5.783 5.480 5.206 4.956 4.728 4.520) 4.328 4.151 3.988 27 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.154 28 3.990 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.335 4.157 29 3.992 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 | 4.975 4.743 4.743 4.531 4.337 4.159 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.746 4.534 4.339 4.160 3.995 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7.105 6.6426.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 6.935 7.984 3.994