Swan Industries is deciding whether to automate one phase of its production process. The manufacturing equipment...
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Swan Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $930,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute this project's NPV using Swan's 16 % hurdle rate. Should Swan invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash PV Factor ( Inflow -16%) Years Present Value Year 1 Present value of each year's inflow: (n = 1) Year 2 Present value of each year's inflow: (n=2) Year 3 Present value of each year's inflow: (n = 3) Year 4 Present value of each year's inflow: (n = 4) Enter any number in the edit fields and then click Check Answer. Data Table Check Answer. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Print Get More Help - $ 261,000 254,000 224,000 210,000 204,000 177,000 Done these updates. ework: M 9 Reference Present Value of $1 Periods 5% 8% 9% Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 1% 2% 3% 4% 6% 7% 10% 12% 14% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 15% 16% 18% 20% 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0424 0.361 0.308 0.284 0.263 0.225 0.194 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.896 0.804 0.722 0.650 0.585 0.527 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Darind 15 0861 0.743 0642 0.555 0417 0362 0315 027502300183 0.125 0.099 0.078 0.140 0123 0108 0.08 Period 8 Period 9 Period 10 Period 11 AR1 0.065 Print Done Treip du Row ck ck 9 TL Reference Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Darind 15 Present Value of Ordinary Annuity of $1 5% 6% 7% 8% 0.962 0.943 0.935 0.926 1.859 1.833 1.808 2.723 2.673 2624 3.546 3.465 3.387 4.329 4212 4.100 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 9% 10% 12% 14% 15% 16% 18% 20% 1.783 1.759 1.736 1.690 1.647 1.626 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 1.605 1.566 1.528 3.037 2.914 2.855 2.798 2.690 2.589 3.312 3.240 3.170 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 4.623 4486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 5.206 5.033 4.868 4.564 4.288 4.160 5.747 5.535 5.335 4.968 4.639 4.487 4.039 3.812 3.605 6.247 5.995 5.759 6.710 6.418 6.145 5.328 4.946 5.650 5.216 4.344 4.078 3.837 4.772 4.607 4.303 4.031 5.029 4.656 4.327 5.019 4.833 4.494 4.192 5.197 4.793 4.439 5.938 5.453 5.234 6.814 6.194 5.660 5.421 6.424 5.842 5.583 5.342 4.910 4.533 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 R550 8061 7606 RR11 R142 5847 5.575 5.002 4675 Done 1% 2% 3% 4% 0.990 0.980 0.971 0.962 1.970 1.942 1.913 1.886 2.941 2.884 2.829 2.775 3.902 3.808 3.717 3.630 4.853 4.713 4.580 4.452 5.242 5.076 4.917 4.767 5.795 5.601 5.417 6.728 6.472 6.230 6.002 5.786 5.582 5.389 7.652 7.325 8.566 8.162 7.020 6.733 6.463 6.210 5.971 7.786 7.435 7.108 6.802 6.515 8.111 9.471 8.983 8.530 7.722 7.360 7.024 10.368 9.787 9.253 8.760 8.306 7.887 7.499 11.255 10.575 9.954 7.139 6.805 6.495 8.863 8.384 7.943 7.536 7.161 9.394 8.853 8.358 7.904 7.487 7.103 9.385 9.986 10.563 9.899 9.295 8.745 12.134 11.348 10.635 13.004 12.106 11.296 12 AR5 12 810 11 038 11 118 10 390 0712 0 108 Print roro-mreip - X ns Requirements 1. Compute this project's NPV using Swan's 16% hurdle rate. Should Swan invest in the equipment? 2. Swan could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $77,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $53,000 residual value at the end of year 7. Should Swan invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done - X and then click Check Answer. + Rogo Clear All d will renth Swan Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $930,000. Projected net cash inflows are as follows: (Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute this project's NPV using Swan's 16 % hurdle rate. Should Swan invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash PV Factor ( Inflow -16%) Years Present Value Year 1 Present value of each year's inflow: (n = 1) Year 2 Present value of each year's inflow: (n=2) Year 3 Present value of each year's inflow: (n = 3) Year 4 Present value of each year's inflow: (n = 4) Enter any number in the edit fields and then click Check Answer. Data Table Check Answer. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Print Get More Help - $ 261,000 254,000 224,000 210,000 204,000 177,000 Done these updates. ework: M 9 Reference Present Value of $1 Periods 5% 8% 9% Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 1% 2% 3% 4% 6% 7% 10% 12% 14% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 15% 16% 18% 20% 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0424 0.361 0.308 0.284 0.263 0.225 0.194 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.896 0.804 0.722 0.650 0.585 0.527 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Darind 15 0861 0.743 0642 0.555 0417 0362 0315 027502300183 0.125 0.099 0.078 0.140 0123 0108 0.08 Period 8 Period 9 Period 10 Period 11 AR1 0.065 Print Done Treip du Row ck ck 9 TL Reference Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Darind 15 Present Value of Ordinary Annuity of $1 5% 6% 7% 8% 0.962 0.943 0.935 0.926 1.859 1.833 1.808 2.723 2.673 2624 3.546 3.465 3.387 4.329 4212 4.100 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 9% 10% 12% 14% 15% 16% 18% 20% 1.783 1.759 1.736 1.690 1.647 1.626 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 1.605 1.566 1.528 3.037 2.914 2.855 2.798 2.690 2.589 3.312 3.240 3.170 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 4.623 4486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 5.206 5.033 4.868 4.564 4.288 4.160 5.747 5.535 5.335 4.968 4.639 4.487 4.039 3.812 3.605 6.247 5.995 5.759 6.710 6.418 6.145 5.328 4.946 5.650 5.216 4.344 4.078 3.837 4.772 4.607 4.303 4.031 5.029 4.656 4.327 5.019 4.833 4.494 4.192 5.197 4.793 4.439 5.938 5.453 5.234 6.814 6.194 5.660 5.421 6.424 5.842 5.583 5.342 4.910 4.533 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 R550 8061 7606 RR11 R142 5847 5.575 5.002 4675 Done 1% 2% 3% 4% 0.990 0.980 0.971 0.962 1.970 1.942 1.913 1.886 2.941 2.884 2.829 2.775 3.902 3.808 3.717 3.630 4.853 4.713 4.580 4.452 5.242 5.076 4.917 4.767 5.795 5.601 5.417 6.728 6.472 6.230 6.002 5.786 5.582 5.389 7.652 7.325 8.566 8.162 7.020 6.733 6.463 6.210 5.971 7.786 7.435 7.108 6.802 6.515 8.111 9.471 8.983 8.530 7.722 7.360 7.024 10.368 9.787 9.253 8.760 8.306 7.887 7.499 11.255 10.575 9.954 7.139 6.805 6.495 8.863 8.384 7.943 7.536 7.161 9.394 8.853 8.358 7.904 7.487 7.103 9.385 9.986 10.563 9.899 9.295 8.745 12.134 11.348 10.635 13.004 12.106 11.296 12 AR5 12 810 11 038 11 118 10 390 0712 0 108 Print roro-mreip - X ns Requirements 1. Compute this project's NPV using Swan's 16% hurdle rate. Should Swan invest in the equipment? 2. Swan could refurbish the equipment at the end of six years for $106,000. The refurbished equipment could be used one more year, providing $77,000 of net cash inflows in year 7. Additionally, the refurbished equipment would have a $53,000 residual value at the end of year 7. Should Swan invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Print Done - X and then click Check Answer. + Rogo Clear All d will renth
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Solution Requirement 1 Please see the attached sheet Swan Industries can Not invest in ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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