Question: Required information The Chapter 7 Form worksheet is to be used to create your own worksheet version of Example E and in the text. 2.




Required information The Chapter 7 Form worksheet is to be used to create your own worksheet version of Example E and in the text. 2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 7B-1 and Exhibit 7B-2. (Use appropriate factor(s) from the tables provided.) a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? d. Reset the discount rate to 17%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? EXHIBIT 7B-1 Present Value of $1;1(1+r)n IBIT 7B-2 Present Value of an Annuity of $1 in Arrears; 1r[11(1+r)n ]
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