The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $72,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 Cash Flow $35,000 38,000 35,000 28,000 12,000 a. If the cost of capital is 12 percent, what is the net present value of selecting a new machine? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Net present value b. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Internal rate of return % c. Should the project be accepted? Yes No Appendix B Present value of $1, PVF PV = FV 1 (1 + i)" Percent Period 1% 3% 4% 5% 6% 8% 9% 11% 12% 1 0.943 0.893 0.990 0.980 0.971 0.943 0.926 0.857 7% 0.935 0.873 0.816 2 0.962 0.925 0.889 0.855 0.890 0.952 0.907 0.864 0.823 0.917 0.842 0.772 0.708 10% 0.909 0.826 0.751 0.683 0.901 0.812 0.731 0.797 0.712 3 0.840 0.915 0.888 0.794 0.735 4 0.792 0.763 0.659 0.636 0.971 0.961 0.951 0.942 5 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.863 0.784 0.747 0.621 0.593 0.567 0.681 0.630 6 0.507 0.705 0.665 0.535 0.482 7 0.583 0.452 8 0.627 0.540 0.434 0.404 0.933 0.923 0.914 0.905 0.837 0.813 0.789 0.766 0.744 0.722 9 0.500 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 10 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.592 0.558 0.527 0.463 0.429 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.361 0.322 0.287 11 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.896 0.804 0.391 0.352 0.317 0.286 0.258 0.232 12 0.788 0.397 0.257 13 0.368 0.340 0.773 0.758 0.743 0.229 0.205 14 0.887 0.879 0.870 0.861 0.853 0.844 15 0.555 0.362 0.315 0.239 0.209 0.183 0.163 16 0.728 0.458 0.339 0.188 17 0.701 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0.170 0.146 0.714 0.700 0.686 0.436 0.416 0.292 0.270 0.250 0.317 0.296 18 0.836 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 0.054 0.212 0.153 0.534 0.513 0.494 0.475 0.456 0.375 0.130 19 0.828 0.396 0.116 0.232 0.215 0.218 0.198 0.180 0.164 0.149 0.092 0.057 20 0.277 0.258 0.184 0.820 0.780 0.104 0.673 0.610 0.194 0.178 0.116 0.075 0.377 0.295 0.231 0.138 0.124 0.074 0.044 25 0.146 0.059 30 0.742 0.552 0.131 0.099 0.308 0.208 40 0.672 0.453 0.307 0.142 0.067 0.046 0.032 0.022 0.015 0.005 0.033 0.011 0.003 50 0.608 0.372 0.228 0.141 0.087 0.034 0.021 0.013 0.009 Appendix B (concluded) Present value of $1 Percent Period 13% 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 50% 1 0.885 0.877 0.862 0.840 0.833 0.800 0.741 0.714 0.667 0.847 0.718 2 0.783 0.743 0.694 0.640 0.769 0.675 0.444 0.855 0.731 0.624 0.534 0.870 0.756 0.658 0.572 0.497 0.769 0.592 0.455 0.706 0.593 3 0.579 0.512 0.693 0.613 0.543 0.641 0.552 0.609 0.515 0.549 0.406 0.301 0.510 0.364 0.260 0.296 0.198 4 0.592 0.499 0.482 0.350 0.269 5 0.519 0.476 0.456 0.419 0.402 0.223 0.186 0.410 0.328 0.262 0.210 6 0.480 0.425 0.456 0.400 0.432 0.376 0.327 0.437 0.370 0.314 0.266 0.410 0.354 0.305 0.390 0.333 0.352 0.296 0.335 0.279 0.233 0.207 0.159 7 0.165 0.122 0.132 0.088 0.059 0.133 0.095 0.068 8 0.376 0.351 0.285 0.249 0.168 0.123 .091 0.039 9 0.333 0.209 0.308 0.270 0.284 0.247 0.263 0.227 0.243 0.208 0.225 0.191 0.134 0.107 0.094 0.073 0.067 .050 .048 0.035 0.026 0.017 10 0.295 0.176 0.194 0.162 0.135 0.1 12 11 0.012 0.261 0.231 0.237 0.208 0.215 0.187 0.163 0.195 0.168 0.162 0.137 0.148 . 124 .086 0.069 0.056 0.043 0.037 0.027 0.025 0.018 12 0.008 0.178 . 152 0.130 0.111 13 0.204 0.182 0.145 0.1 16 0.093 0.055 0.033 .020 0.005 0.104 .088 14 0.160 0.141 0.125 0.099 0.078 0.044 0.025 0.003 0.181 0.160 15 0.108 0.065 0.020 0.002 0.140 0.123 0.108 0.095 .081 16 0.123 0.107 0.093 0.141 0.015 0.011 0.008 .084 .071 0.060 .093 0.054 0.035 0.028 0.023 0.002 0.015 0.012 .013 0.009 .006 0.005 .003 0.002 0.002 0.001 17 0.074 .062 .052 0.044 .037 0.125 0.080 0.045 0.006 0.069 0.059 .001 18 0.095 0.081 0.069 .051 0.038 0.018 .001 0.009 0.007 19 0.083 0.060 0.051 0.043 .031 0.014 0.111 0.098 .087 0.047 0.026 0.008 0.005 .003 .002 0.001 20 25 30 0.073 0.038 0.020 0.005 0.070 0.061 0.030 0.015 0.004 0.001 0.051 .024 0.012 0.003 .043 0.020 0.009 0.002 0.037 .016 0.007 0.001 .031 .013 0.005 0.001 0.026 0.010 0.004 .012 0.004 0.001 0.005 0.001 40 0.001 50 0.002 0.001 0.001