Question 5 of 5 - 75 Current Attempt in Progress Drake Corporation is reviewing an investment proposal. The initial cost is $105,600. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investment's life. Investment Proposal Book Annual Annual Year Value Cash Flows Net Income 1 $69.400 $44,300 $8,100 42,600 39.700 12.900 20,500 36,000 13.900 8,800 30,300 18,600 23.940 15,140 4 5 0 Drake Corporation uses an 11% target rate of return for new investment proposals. Click here to view the factor table. What is the cash payback period for this proposal? (Round answer to 2 decimal places, s. 10.50) Cash payback period years (b) What is the annual rate of return for the investment? (Round answer to 2 decimal places, eg 10.50%) Annual rate of return for the investment (c) What is the net present value of the investment? (If the net present value is negative, use either a negative sign preceding the numberes. -45 or parentheses eg (45). Round answer to decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value $ Periods 0 1 2 3 5 4% 1.00000 1.04000 1.08160 1.12486 1.16986 1.21665 1.26532 1.31593 1.36857 1.42331 1.48024 1.53945 1.60103 1.66507 1.73168 1.80094 1.87298 1.94790 2.02582 2.10685 2.19112 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 5% 1.00000 1.05000 1.10250 1.15763 1.21551 1.27628 1.34010 1.40710 1.47746 1.55133 1.62889 1.71034 1.79586 1.88565 1.97993 2.07893 2.18287 2.29202 2.40662 2.52695 2.65330 6% 1.00000 1.06000 1.12360 1.19102 1.26248 1.33823 1.41852 1.50363 1.59385 1.68948 1.79085 1.89830 2.01220 2.13293 2.26090 2.39656 2 54035 2.69277 2.85434 3.02560 3.20714 79 1.00000 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 2.10485 2.25219 2.40985 2.57853 2.75903 2.95216 3.15882 3.37993 3.61653 3.86968 8% 1.00000 1.08000 1.16640 1.25971 1.36049 1.46933 1.58687 1.71382 1.85093 1.99900 2.15892 2.33164 2.51817 2.71962 2.93719 3.17217 3.42594 3.70002 3.99602 4.31570 4.66096 104 1.00000 1.00000 1.09000 1.10000 1.18810 1.21000 1.29503 1.33100 1.41158 1.46410 1.53862 1.61051 1.67710 1.77156 1.82804 1.94872 1.99256 2.14359 2.17189 2.35795 2.36736 2.59374 2.58043 2.85312 2.81267 3.13843 3.06581 3.45227 3.34173 3.79750 3.64248 3.97031 4.59497 4.32763 5.05447 4.71712 5 55992 5.14166 6.11591 5.60441 6.72750 11% 1.00000 1.11000 1.23210 1.36763 1.51807 1.68506 1.87041 2.07616 2.30454 2.55803 2.83942 3.15176 3.49845 3.88328 4.31044 12% 1.00000 1.12000 1.25440 1.40493 1.57352 1.76234 1.97382 2.21068 2.47596 2.77308 3.10585 3.47855 3.89598 4.36349 4.88711 15% 1.00000 1.15000 1.32250 1.52088 1.74901 2.01136 2.31306 2.66002 3.05902 3.51788 4.04556 4.65239 5.35025 6.15279 7.07571 8.13706 9.35762 10.76126 12 37545 14.23177 16.36654 4.17725 4.78459 5.47357 5.31089 5.89509 6.54355 7.26334 8.06231 6.13039 6.86604 7.68997 8.61276 9.64629 TABLE 2 Future Value of an Annuity of 1 (n) Payments 4% 5% 8% 99 10% 11% 129 15% 1 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 210000 2.11000 2.12000 2.15000 3 3.12160 3.15250 3.18360 3.2149 3.24640 3.27810 3.31000 334210 3.37440 3.47250 4 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5 5.41632 5.52563 5.63709 5.7507 5.86660 5.98471 6.10510 6.22780 6,35285 6.74238 6 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 7.91286 8.11519 8.75374 7 7.89829 8.14201 8.39384 8.6540 8.92280 9.20044 9.48717 9.78327 10.0890! 11.06680 8 9.21423 9.54911 9.89747 10.2598 10.63663 11.02847 11.43589 11.85943 12.29969 13.72682 9 10.58280 11.02656 11.49132 11.9780 12.48756 13.02104 13.57948 14.16397 14.77566 16.78584 10 12.00611 12.57789 13.18079 13.8164 14.48656 15.19293 15.93743 16.72201 17.54874 20.30372 11 13.48635 14.20679 14.97164 15.7836 16.64549 17.56029 18.53117 19.56143 20.65458 24.34928 12 15.02581 15.91713 16.86994 17.8885 18.97713 20.14072 21.3842822.71319 24.13313 29.00167 13 16.62684 17.71298 18.88214 20:1406 21.49530 22.95339 24.52271 26.21164 28.02911 34.35192 14 18.29191 19,59863 21.01507 22.5505 24.21492 26.01919 27.97498 30.09492 32.39260 40.50471 15 20.02359 21.57856 23.27597 25.1290 27.15211 29.36092 31.77248 34.40536 37.27972 47.58041 16 21.82453 23.65749 25.67253 27.8881 30.32428 33.00340 35.94973 39.18995 42.75328 5571747 17 23.69751 25.84037 28.21288 30.8402 33.7502336.97351 40.54470 44.50084 48.88367 65.07509 18 25.64541 28.13238 30.9056533.9990 37.45024 41.30134 45.59917 50 39593 55.749727583636 19 27.67123 30 53900 33.75999 37 3790 41.44626 46.01846 51.15909 56.93949 63.43968 88 21181 20 29.77808 33.06595 36.78559 40.9955 45.76196 51.16012 57.27500 64.20283 72.05244 102.44358 TABLES Present Value ol (m) Periods 1 2 3 4 5 6 7 8 9 10 96154 92456 88900 85480 .82193 29031 .75992 73069 70259 67556 64958 62460 .60057 57748 55526 53391 51337 49363 47464 45639 5% 95238 90703 86384 82270 .78353 174622 71068 67684 64461 .61391 58468 55684 53032 50507 48102 45811 43630 41552 39573 37689 6% 94340 89000 83962 .79209 74726 70496 66506 .62741 59190 55839 52679 49697 46884 44230 41727 39365 37136 35034 33051 31180 79% 093458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 050835 0.47509 0.44401 0.41496 0.38782 0.36245 033873 031657 0.29586 0.27615 0.25842 8% 92593 85734 -79383 73503 68058 63017 58349 54027 50025 46319 42888 39711 36770 34046 31524 29189 27027 25025 23171 21455 91743 84168 .77218 .70843 .64993 59627 54703 50187 46043 42241 38753 35554 32618 29925 27454 25187 23107 21199 .19449 17843 10% 90909 82645 .75132 68301 .62092 56447 51316 46651 42410 38554 35049 31863 .28966 26333 23939 11% 90090 .81162 73119 .65873 59345 .53464 48166 43393 39092 35218 31728 28584 25751 29499 20100 18829 16963 .15282 13768 12403 12% 89286 -79719 .71178 63552 56743 50663 45235 40388 36061 32197 28748 25668 22917 20462 .18270 16312 14564 13004 1 1611 10367 15% 86957 -75614 65752 57175 49718 43233 37594 32690 28426 24719 21494 18691 16253 14133 12289 10687 09293 08081 07027 06110 11 12 13 14 15 16 17 18 19 20 21763 .19785 17986 .16351 14864 TABLE4 Present Value of an Annuity of 1 m 906 Payments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 4% 96154 188609 2.77509 3.62990 445182 5.24214 6.00205 6.73274 7.43533 8.1 10% 8.76048 9.38507 9.98565 10.56312 11.11839 11.65230 12.16567 12.65930 13.13394 13.59033 55 95238 1,85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 8.30641 8.86325 9.39357 9.89864 10.37966 10.83777 11.27407 11.68959 12.08532 12.46221 6% 94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.10590 10.47726 10.82760 11.15812 11.46992 79 0.93458 1.80802 2.62432 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 7.02358 7.49867 7.94269 8.35765 8.74547 9.10791 9.44665 9,76322 10.05909 10.33560 10.59401 8 92593 1.78326 257710 331213 3.99271 4.62288 5.20637 5.74664 6.24689 6.71008 7.13896 7.53608 7.90378 8.24424 8.59948 8.85137 9.12164 9.37189 9.60360 9.81815 91743 1.75911 2.53130 3.23972 3.88965 448592 5.03295 5.53482 5.99525 6.41766 6.80519 7.16073 7.48690 7.78615 8.06069 8.31256 8.54363 8.75563 8.95012 9,12855 10% 90909 1.73554 2.48685 3.16986 3.79079 4.35526 4.86842 5.33-493 5.75902 6.14457 6.19506 6.81369 7.10336 7.36669 7.60608 7.82371 802155 8.2 0141 8.36492 851356 11% 90090 1.71252 2.44371 3.10245 3.69590 4.23054 4.71220 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.98187 7.19087 7.37916 7.54879 7.70162 7.83929 7.96333 12% 15% 89286 86957 1.69005 1.62571 2.40183 228323 3.03735 2.85498 3.60478 3.35216 4.11141 3.78448 4.56376 4.16042 4.96764 4.48732 532825 4.77158 5.65022 5.01877 5.93770 5.23371 6.19437 5.42062 6.42355 5.58315 6.62817 5.72448 6.81086 5.84737 6.97399 5.95424 7.1.1963 6,04716 7.24967 6.12797 736578 6.19823 7.46944 6.25933 16 17 18 19 20