The management of Kunkel Company is considering the purchase of a $21,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of return is 12% Click here to view Exhibit 7B-1 and Exhibit 7B-2 to determine the appropriate discount factor(s) using table Required: 1. Determine the net present value of the investment in the machine 2. What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the net present value of the investment in the machine. Note: Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount. Use the appropriate table to determine the discount factor(s). Net present value EXHIBIT 7B-1 Present Value of $1. Periods 4% 5% 6% 7% 8% 9% 10% 11% 1 0.962 0952 0.943 0.935 0926 0917 2 0.925 0.907 0.890 0.873 0857 3 4 5 6 7 0.760 0.711 0665 S 9 0703 0.645 0.592 0.544 10 0.676 0.614 0.558 0508 11 0.650 0.585 0.527 12 13 14 0577 0505 0.442 0388 0.340 0.299 0.263 0.232 0.205 0.181 0160 0.141 15 0555 0.481 0417 0.362 0.315 0275 0239 0.209 0.183 0160 0140 0123 16 17 15 19 20 21 22 24 25 26 30 40 16% 17% 18% 19% 13% 14% 15% 12% 0.909 0901 0.893 0.885 0.877 0.870 0.362 0.855 0.847 0840 0.833 0.842 0826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.889 0.864 0.840 0816 0.794 0.772 0.751 0.731 0.712 0693 0675 0.658 0641 0624 0609 0593 0.579 0.855 0823 0792 0763 0.735 0.708 0.683 0659 0636 0.613 0592 0572 0552 0.534 0.516 0.499 0.482 0.467 0451 0437 0.423 0.410 0822 0.784 0.747 0.713 0681 0650 0621 0.593 0.567 0.543 0.519 0497 0476 0456 0437 0419 0.402 0.386 0370 0.355 0341 0.328 0.790 0.746 0.705 0.666 0.630 0596 0.564 0.535 0.507 0.480 0456 0432 0410 0390 | 0370 0.352 0.335 0.319 0303 0.289 0275 0.262 0314 0.296 0.279 0.263 0.249 0235 0.222 0210 0623 0583 0.547 0.513 0482 0.452 0425 0.400 0.376 0354 0333 0.191 0.179 0.168 0.731 0.677 0.627 0.582 0540 0 502 0467 0.434 0.404 0.376 0.351 0327 0.305 0.285 0.266 0.249 0233 0218 0.204 0.500 0.460 0.424 0.391 0361 0333 0308 0284 0263 0.243 0225 0.209 0194 0180 0.167 0155 0144 0.134 0.463 0422 0386 0.352 0.322 0295 0270 0.247 0227 0208 0.191 0176 0162 0.149 0.137 0.126 0.116 0.107 0475 0429 0.388 0.350 0.317 0287 0.261 0237 0215 0195 0.178 0162 0148 0.135 0.123 0112 0103 0094 0.086 0.625 0557 0.497 0444 0.397 0356 0319 0286 0.257 0231 0208 0.187 0168 0.152 0.137 0124 0.112 0102 0092 0 083 0.076 0.069 0.601 0530 0469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0163 0.145 0.130 0116 0104 0.093 0.084 0075 0068 0061 0.055 0058 0078 0069 0062 0055 0049 0044 0.125 0.1110099 0108 0.095 0084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 0.534 0.458 0.394 0339 0.292 0.252 0.218 0188 0,163 0.141 0123 0107 0.093 0081 0071 0062 0054 0047 0042 0.036 0032 0028 0513 0436 0.371 0.317 0270 0231 0195 0.170 0146 0125 0.108 0093 0.080 0.069 0.060 0052 0045 0019 0034 0030 0494 0416 0.350 0.296 0.250 0212 0180 0153 0130 0.1110095 0081 0.069 0.059 0.051 0.044 0038 0032 0.028 0475 0.396 0.331 0277 0232 0.194 0164 0138 0.116 0098 0.083 0.070 0.060 0051 0043 0037 0031 0027 0.023 0456 0377 0312 0258 0215 0178 0149 0124 0104 0.087 0.073 0061 0051 0043 0037 0.031 0.026 0022 0439 0359 0294 0242 0.199 0.164 0135 0112 0.093 0077 0064 0.053 0044 0037 0031 0026 0.022 0.018 0015 0013 0011 0009 0422 0342 0.278 0.226 0.184 0150 0.123 0101 0.083 0068 0.056 0.046 0.038 0032 0026 10022 0015 0012 0010 0009 0.007 0.006 23 0406 0326 0.262 0.211 0170 0138 0.112 0091 0074 0.060 0049 0040 0033 0027 0022 0018 0390 0310 0247 0197 0.158 0126 0102 0082 0066 0053 0.043 0035 0.028 0.023 0.019 0015 0013 0.010 0.008 0.007 0004 0375 0295 0233 0.184 0.146 0.116 0092 0.074 0.059 0047 0038 0030 0024 0020 0016 0013 0010 0009 0.007 0.006 0.005 0361 0281 0220 0172 0135 0.106 0.084 0.066 0053 0.0060 005 0004 0.003 0042 0.033 0026 0.009 0.007 0017 0014 0011 0.021 0005 0004 0.0030002 27 0.347 0.268 0.207 0161 0125 0.098 0.076 0060 0047 0037 0.0290023 0018 0014 0011 0.009 0.007 0.006 0002 0002 28 0333 0255 0196 0150 0.116 0.090 0.069 0.054 0042 0033 0.026 0020 0016 0012 0010 0008 0006 0.005 0004 0.0031 29 0.321 0.243 0185 0141 0107 0082 0.063 0048 0037 0029 0022 0017 0014 0011 0.008 0006 0005 0.004 0.003 0.002 0.002 0.002 0.003 0.002 0.002 0.001 0308 0.231 0.174 0131 0099 0075 0.057 0.044 0013 0026 0020 0015 0012 0.009 |0007 0005 0004 0.003 0000 0000 0208 0142 0.097 0.067 0.046 0032 0022 0015 0011 0008 0.005 0.004 0.003 0002 0001 0.001 0.001 0.000 0.000 0.000 20% 21% 22% 23% 24% 25% 0826 0 820 0.813 0.806 0.800 0683 0 564 0.551 0.672 0.661 0650 0640 0.537 0.524 0.512 0026 0.023 0024 0021 0018 0020 0017 0014 0.019 0016 0014 0012 0015 0015 0013 0011 0009 0.007 0.006 0005 EXHIBIT 7B-2 Present Value of an Annuity of $1 in Arrears, 11 118 10 380 (1+r) 9% 10% 11% 12% 6% 7% 8% 13% 14% 15% 19% 16% 17% 18% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0885 0.877 0.870 0.862 0.855 0.847 0.840 0833 0826 0.820 0.813 0.806 0.800 1886 1859 1.833 1808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1605 1.585 1.566 1547 1.528 1509 1492 1474 1457 1440 2.531 2487 2.444 2.402 2.361 2.322 2.283 2.246 2210 2.174 2.140 2.106 2.074 2.042 2.011 1981 1952 3 240 3.170 3.102 3037 2.974 2.914 2.855 2.798 2.743 2 690 2 639 2.589 2 540 2.494 2.448 2.404 2.362 3.890 3.791 3.696 3.605 3.517 3.433 3352 3.274 3.199 3.127 3.058 2.991 2926 2.864 2.803 2.745 2.689 4.486 4.355 4.231 4111 3998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2951 5.033 4.868 4.712 4.564 4423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3.518 3.421 3.329 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4031 3905 3.786 3.673 3.566 3.463 5.650 5426 5216 5.019 4833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3 682 3.571 5.938 5.687 5.453 5 234 5.029 4.836 4656 4486 4.327 4.177 4035 3.902 3.776 3.656 6314 6 492 6.194 5918 5 660 5.421 5.197 4988 4.793 4611 4439 4278 4127 3985 3851 3725 7487 7103 6750 6424 6122 5842 5.583 5.342 5 118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6982 6628 6.302 6 002 5.724 5.468 5.229 5.008 4802 4611 4.432 4.265 4108 3.962 3.824 9712 9108 8559 8061 7.606 7.191 6811 6.462 6142 5.847 5.575 5324 5092 4876 4.675 4 489 4.315 4.153 4001 3859 10 106 9447 8851 8.313 7824 7379 6974 6.604 6265 5.954 5.668 5.405 5 162 4.938 4.7304536 4.357 4189 4.033 3.887 10.477 9.763 9122 8544 8022 7549 7.120 6.729 6373 6.047 5749 5475 5.222 4990 4.775 4576 4391 4219 40593.910 12 659 11 690 10 828 10.059 9.372 87568.201 7.702 7250 6.840 6.467 6.128 5.818 5.534 5.273 5033 4812 4 608 4419 4 243 4 080 3.928 13 134 12.085 11 158 10 336 9604 8950 8365 739 7366 6935 6550 6.198 5377 5.584 5316 5070 4843 4635 4.4424263 4097 3.942 13.590 12.462 11470 10 594 9.129 8514 7963 7469 7025 6623 6259 5929 5628 5.3535101 4870 4657 4.460 4279 4110 3954 10836 10 017 9292 8649 8075 7562 7.102 6687 6312 5.973 5.665 5384 5.127 4.591 4.675 4476 4292 4121 3.963 10 201 9442 8772 8176 7645 7170 6743 6359 6011 5.696 5410 5 149 4909 4690 4.488 4302 4.130 3970 580 8883 266 7.718 7230 6.792 6399 6044 5.723 5.432 5167 4925 4.703 4499 4311 4.137 3976 9.707 8.955 83487784 7283 6835 6434 6073 5.746 5.451 5182 4.937 4.713 4507 4.318 4.143 3981 98239077 8422 7843 7330 6573 6.464 6097 5766 5.467 5195 4.948 4.721 4514 4323 4147 3.985 9.929 9.161 488 2896 7372 6906 6.491 6118 5.783 5.480 5.206 4.956 4.7228 4320 4328 4151 3958 10.027 9.2378548 7.943 7.409 6.935 6.514 6136 5.798 5.492 5215 4.964 4.734 4.524 4332 4154 3.990 10 116 9307) 602 7984 7441 6.961 6534 6152 5810 5502 5223 4970 4.739 4.528 4335 4157 3.992) 10.198 9.370 650 8.022 7.470 6.983 6.551 6 166 5820 5510 5.229 4.975 4743 4.531 4337 4159 3994 10 274 9427 8.694 80557496 7.003 6.566 6177 5829 5517 5235 4.979 4746 4534 4339 4160 3995 11 925 10.757 9.779 951 8244 7634 7105 6.642 6.233 5.871 5548 5258 4.997 4.7604544 4347 4.166 3.999 Periods 4% 5% 1 2 3 2.775 2.723 2.673 2.624 2.577 4 3.630 3.546 3.465 3 387 5 4.452 4.329 4.212 4.100 3.312 3.993 6 5242 5076 4.917 4.767 4 623 7 6.002 5.786 5.582 5.389 5.206 8 6.733 6.463 6210 5971 5.747 5.535 5 335 9 7.435 7.108 6.802 6515 6.247 5.995 5.759 10 8.111 7.722 7.360 7024 6.710 6418 6 145 5 889 11 8.760 8.306 7887 7.499 7.139 6 805 6.495 | 6.207 12 9.385 8 863 8 384 7943 7.536 7.161 13 9.986 9.394 8.853 8.358 7904 14 15 16 11 652 17 18 19 20 21 14.029 12 821 11 764 22 14:451 13 163 12 042 11 061 23 14 857 13 489 12 303 11 272 10 371 24 15 247 13 799 12:550 11.469 10 529 25 15 622 14 094 12 733 11 654 10.675 26 15.983 14 375 13.003 11 326 10 $10 27 16.330 14 643 13 211 11 987 10 935 28 16 663 14 898 11 406 12.137 11 051 29 16.984 15.141 13 591 12 278 30 17.292 15:372 13 765 12 409 11.158 11 258 19 793 17 159 15 046 13 332 40 10 838 12 166 11 274 9818