Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: Cost of new equipment and timbers Working capital required $ 275,000 $ 100,000 $ 120,000 Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years $40,000 $65,000 *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 20%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: a. Determine the net present value of the proposed mining project. (Any cash outflows should be indicated by a minus sign. Use the appropriate table to determine the discount factor(s). When you enter a factor, use a whole number followed by 3 decimal places, for example: 0.123.) Year(s) Now Now Present Value of Cash Flow 20% PV Factor Cash Flows 1.000 1.000 1-4 Purchase of equipment Working capital investment Annual net cash receipts Road construction Working capital released Salvage value of equipment Net present value 3 4 4 b. Should the project be accepted? Yes No EXHIBIT 129-1 Present Value of $1: t ty Periods 45 5% 6% 7% 8% 9 10% 12% 14 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0962 0952 0943 0.935 0926 0917 0909 0.901 0893 0885 0877 0870 0862 0855 0.847 0840 0.833 0826 0.820 0813 0.806 0800 2 0.925 0907 0.890 0.873 0857 08420826 0812 0.797 0783 0.769 0.756 0743 0.731 0.718 0706 0.694 0.683 0672 0.661 0.650 0.640 3 0 889 0864 0.840 0.816 0.794 0772 0751 0731 07120.693 06750658 0641 0624 06090593 0579 0564 0551 0.537 0.524 0512 4 0.855 0823 0792 0763 0735 0.708 0.683 0659 0636 06130592 0572 0.552 0534 0516 0.499 0482 0.467 0.451 0437 0.423 0.410 5 0.822 0.784 0747 07130681 0650 0621 0593 0567 0543 0519 0497 0476 0456 0437 0419 0402 0386 0370 0.355 0.341 0328 6 0790 0746 0705 0.666 0630 0596 0564 0535 0.507 0480 0.456 0432 04100390 0.370 0352 0335 03190303 0289 0275 0262 7 0760 0.711 0665 0623 0.583 0547 0.53 0482 0452 0425 0400 0376 0354 0333 03140296 0279 0263 0249 0235 0222 0210 8 0.731 06770627 0582 0540 0.502 04670434 0404 0376 0351 0.327 0305 0285 0266 0249 0233 0 218 0 2040191 01790168 0703 0645 0.592 0544 0.500 0.460 0424 0.391 0.361 0333 0308 0.284 0 263 0243 0225 0.209 0194 01800167 0.155 0144 0134 10 0.676 0614 0558 0.508 0463 0422 0386 0.352 0322 0295 0270 0.247 0227 0208 0191 0176 0.162 0.149 0137 0126 0116 0107 11 0650 0585 0.527 0.475 0429 0388 0.350 0.317 0287 0261 0237 0.215 0195 0178 0162018 0135 0123 0112 0.1030094 0.086 12 0.625 0557 0497 0.444 0397 0.356 0319 0286 0.257 0231 0208 0.187 0.168 0152 0137 0124 0.112 0102 0.092 0.083 0.076 0.069 13 0601 0530 0.469 0.41 0.368 0.326 0290 0.258 0229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0075 0.068 0061 0055 14 0577 0505 0442 0388 0340 0299 0.263 0232 0205 0181 0160 0141 0125 0111 0.099 0088 0078 0069 0.062 0055 0049 0044 15 0.555 0.481 0417 0.362 0315 0275 0.29 0.209 0183 01600140 0.123 0108 0.095 0,084 0074 0065 0.057 0.051 0045 0.040 0.035 0.534 0458 0394 0339 0292 0252 0218 0188 0163 014101230107 0093 0.081 0.071 0.062 0054 0047 00420036 0032 0.028 17 0.513 0436 0371 0317 0270 0231 0198 0.1700146 0.125 0108 0.093 00800069 0.060 0,052 0045 0.039 0.034 0.030 0026 0023 18 0494 0416 0.350 0.295 0.250 0212 0.180 0153 030 0111 0.095 0.081 0069 0059 0.051 0044 0038 0.032 0.028 0.024 0.021 0.018 19 0.475 0.396 0331 0.277 0232 0194 0164 0138 0116 0098 0.083 0.070 0060 0.051 0.043 0037 0031 0.027 0.023 0020 0017 0014 20 0456 0.377 0.3120 258 02150178 0.149 0124 0104 0087 0.073 0061 0051 0043 0.037 0031 0.025 0.022 0.019 0.016 0014 0.012 21 0.439 0.359 0294 0242 0199 0164 01350112 0.093 0077 0.064 0.053 0.044 0.037 0031 0026 0.022 0018 0.01 0.013 0011 0,009 22 0422 0342 0278 0.226 0184 01500123 0101 0083 0.068 00560046 0038 0032 0026 0022 0018 0.015 0.013 0011 0009 0007 23 0406 0326 0262 0211 01700138 0112 0091 0.074 0060 0049 0.040 0033 0027 0022 0018 0.015 0012 0010 0.009 0.007 0006 24 0.390 0310 0247 0197 0158 0126 0102 0082 0.066 0.053 0.043 0.035 0028 0023 0.019 0015 0.013 0.0100008 0007 0006 0005 25 0.375 0295 0.233 01840146 0116 0092 0.074 0059 0.047 0038 0030 0024 0.020 0016 003 0010 0.009 0.007 0006 0005 0004 26 0 361 0281 0220 0172 0135 0106 0084 0066 0053 0.042 0033 0026 0021 0017 0014 0011 0009 0.007 0.006 0005 0004 0003 27 0347 0268 0.207 0161 0125 0098 0.076 0.060 0047 0.037 0.029 0.023 0018 0.014 0.011 0009 0007 0006 0005 0004 0003 0002 28 0333 0255 0196 0.150 0.116 0090 0069 0054 0.042 0033 0026 0.020 0.016 0012 0.010 0.008 0.006 0005 0004 0.003 0.002 0.002 0.321 0243 01850141 0107 0082 0.063 0048 0037 0.0290022 0.017 0014 001 0.008 0006 0005 0004 0.003 0.002 0.002 0002 30 0308 0231 0174 0131 0099 0075 0.057 0044 0033 0.025 0.020 0015 0012 0.009 0.007 0.005 0004 0.003 0.003 0.002 0.002 0.001 40 0208 0142 0097 0.067 0.046 0032 0022 0015 001 0.008 0.005 0004 0.003 0.002 0.001 0.001 0001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 128-2 Present Value of an Annuity of $1 in Arrears: Periods 4% 5% 65 7% 8% 9% 10 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0 952 0943 0935 0.926 0917 0.909 0.901 0.893 0885 0877 0.870 0862 0855 08470840 0833 0.826 0820 0813 0.806 0800 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 3 2775 2723 2673 2624 2577 2531 2487 2444 2402 2361 2322 2283 2246 2210 2174 2140 2106 2074 2042 2011 1981 1952 4 3.630 3.546 3.465 3387 3312 324031703102 3037 2974 294 2.855 2798 2743 2690 2639 2 589 2540 2494 2448 2404 2362 5 4.452 43294212 4100 3 9933.890 3791 3696 3605 3.517 3433 3352 3274 3199 3127 3058 2991 2926 2864 2.803 2745 2689 6 5242 5076 4917 4767 4623 4.486 4355 4231 4111 3998 3889 3784 3685 3589 3.498 3410 3326 3.245 3167 3,092 3020 2951 7 6 002 5786 5582 5.389 5206 5033 4868 4712 4564 4423 4288 4160 4039 3922 3812 3706 3.605 3508 3.415 3327 3242 3161 8 6733 6463 6210 5971 5747 5535 5335 5 146 4968 4799 4639 4487 4 344 4207 4078 3954 3837 3726 3619 3518 3.421 3329 9 7435 7108 6 802 6515 6.247 5995 5759 5537 5328 5132 49464772 4607 4451 4303 4163 4031 3905 37863673 3.566 3.463 10 8.111 7722 7360 7024 6710 6 418 6145 5889 5650 5.426 5 216 5019 4833 4659 4494 4339 4192 4054 3923 3.799 3682 3571 11 8760 8306 7887 7499 7139 6 805 6495 6 207 5938 5687 5453 5234 5.029 48364656 4486 43274177 4035 3902 3776 3656 12 9 385 8863 8384 7943 7536 7161 6.814 6.492 6194 5918 5660 5 421 5197 4988 4793 4611 4 439 4278 4127 3985 3851 3725 13 9.986 9394 8.853 8 358 7904 74872103 6750 6.424 6122 5842 5583 5342 5118 4910 4715 4533 4362 4203 4053 3912 3780 14 10563 9899 9.295 87458244 77867367 6982 6628 6302 6,002 57245 468 5229 5.008 4802 461 4432 4265 4108 3962 3824 15 11118 503809712 9108 8559 8061 7606 7191 6811 6.462 6142 58475575 5324 5092 4876 4675 4489 43154153 4001 3859 16 11652 10.838 10106 9447 8851 8.3137824 7379 6974 6604 6265 5954 5668 5 405 5162 4938 4730 4536 4357 41894033 3887 17 12.166 11274 10.477 9763 9122 8544 8022 75497120 6729 6373 6047 5749 5475 5222 4 990 4775 4576 4391 4219 4059 3910 18 12.659 11690 10 828 10.0599372 8756 8201 7702 72506840 6 467 6128 5818 5534 5.273 5033 48124608 4419 4243 4080 3928 19 13134 12085 11158 10,336 9604 8950 8365 7839 7366 6938 6550 6198 5872 5584 5 316 5070 4843 4635 4442 4263 4097 3942 20 13 590 12462 11470105949818 9129 8514 7963 7469 7025 6623 6 259 5.929 5628 5353 5101 4870 4657 446042794110 3.954 21 11029 1282111764 90.836 10.017 9292 8649 80757562 2102 6687 6312 5973 5665 5384 51274891 4675 4476 429241213963 22 14.451 13163 12042 11061 10.2019.442 87728176 76457170 6743 6359 6 011 5696 5410 5149 4909 4690 4488 4302 41303970 23 14857 13.489 12 303 11272 10371 9580 8883 8256 7718 7230 6792 6.399 6044 5723 5432 5167 4925 4703 4499 4311 4137 3976 24 15 247 1379912550 1146910529 9707 985 8348 7784 2283 6835 6434 6073 5746.5451 5182 4937 4713 4507 438 43 3981 25 15.622 14.094 12783 11654 10675 9.823 9077842278437330 687364646092 5766 5.467 5195 498 4721 4514 4323 4147 3.985 26 15983 14375 13.003 11826 10.810 9.929 9.161 8488 2896 7372 6.906 6491 6118 5783 5.480 5 206 4 956 4728 4520 43284151 3.988 27 15 330 14643 13.211 11987 10935 10027 9.237 8548 7943 7409 6935 6514 6136 57985492 5215 4964 4734 4524 4332 41543990 28 16 663 14898 13 406 12137 11051 10.116 9307 8602 7984 7441 6961 6534 6152 5810 5502 5223 4970 4739 4528 4335 4157 3992 29 16.98415141 13.591 12.278 11158 10.198 9370 8650 8022 7470 6983 6551 6166 5820 5510 5.229 4975 4743 4531 433741593994 30 17.292 15372 13765 12 409 11 258 10 274 9 427 8694 8055 74967003 6566 6177 5829 5517 5235 49794746 4534 4339 4160 3995 40 19.793 17159 15046 333211925 10757 9779 8951 8244 7634 71056642 6233 58715548 5 258 4997 4760 4544 4347 4166 3999