2 Problem 13-20 Net Present Value Analysis; Uncertain Cash Flows [L013-2, LO13-4] I'm not sure we should lay out $285,000 for that automated welding machine," sald JIm Alder, president of the Superlor Equipment Company. "That's a lot of money, and it would cost us $81,000 for software and Installation, and another $44,400 per year just to maintain the thing. In addition, the manufacturer admits it would cost $44,000 more at the end of three years to replace worn-out parts points I admit it's a lot or money," said Franci Rogers. the controller "But you know the turnover problem we've had with the welding crew. This machine would replace six welders at a cost savings or $111,000 per year. And we would save another $7,200 per year In reduced material waste when you figure that the automated welder would last for six years, I'm sure the return would be greater than our 14% required rate of return." eBook Print "I'm stilll not convinced, countered Mr. Alder. "We can only get $15,500 scrap value out of our old welding equipment if we sell it now and In six years the new machine will only be worth $27,000 for parts. But have your people work up the figures and we'll talk about References the executive committee meeting tomorrow Click here to vlew Exhibit 13B-1 and Exhlbit 13B-2, to determine the appropriate discount factors) using tables. Requlred: 1. Compute the annual net cost savings promised by the automated welding machine 2a. Using the data from (1) above and other data from the problem, compute the automated welding machine's net present value. 2b. Would you recommend purchasing the automated welding machine? 3. Assume that management can identify several intangible benefits associated with the automated welding machine, Including greater flexibilty In shifting from one type of product to another, Improved quality of output, and faster delivery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these Intangible benefits In order to make the new welding machlne an acceptable Investment? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3 Using the data from (1) above and other data from the problem, compute the automated welding machine's net present value. (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) t value Req 1 Req 2B > Complete this question by entering your answers in the tabs below Req 1 Req 2A Req 2B Req 3 Assume that management can identify several intangible benefits associated with the automated welding machine, including greater fexibility in shifting from one type of product to another, improved quality of output, and faster delivery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in order to make the new welding machine an acceptable investment? (Round your final answer to the nearest whole dollar amount. Show less dollar value