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Click the icon to view the interest factors for discrete compounding when MARR = 18% per year. the NPW of the project is! $thousand. (Round to the nearest whole number.) More Info Single Payment Compound Amount Factor (F/A, i, N) 1.0000 2.1800 N 1 2 Compound Amount Factor (F/P, i, N) 1.1800 1.3924 Present Worth Factor (P/F, i, N) 0.8475 0.7182 Equal Payment Series Sinking Present Fund Factor Worth Factor (A/F, i, N) (P/A, i, N) 1.0000 0.8475 0.4587 1.5656 Capital Recovery Factor (A/P, i, N) 1.1800 0.6387 - X

Click the icon to view the interest factors for discrete compounding when MARR = 18% per year. the NPW of the project is! $thousand. (Round to the nearest whole number.) More Info Single Payment Compound Amount Factor (F/A, i, N) 1.0000 2.1800 N 1 2 Compound Amount Factor (F/P, i, N) 1.1800 1.3924 Present Worth Factor (P/F, i, N) 0.8475 0.7182 Equal Payment Series Sinking Present Fund Factor Worth Factor (A/F, i, N) (P/A, i, N) 1.0000 0.8475 0.4587 1.5656 Capital Recovery Factor (A/P, i, N) 1.1800 0.6387 - X

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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### Project Evaluation using NPW Method A large food-processing corporation is considering using laser technology to speed up and streamline the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,650,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of $200,000. If the company's MARR (Minimum Attractive Rate of Return) is 18%, use the NPW (Net Present Worth) method to justify the project. **Click the icon to view the interest factors for discrete compounding when MARR = 18% per year.** **The NPW of the project is $ ____ thousand. (Round to the nearest whole number.)** #### Interest Factors Table for MARR = 18% | **N** | **Single Payment** | | | **Compound Amount Factor (F/P, i, N)** | **Present Worth Factor (P/F, i, N)** | **Equal Payment Series** | | | | | **Compound Amount Factor (F/A, i, N)** | ** Sinking Fund Factor (A/F, i, N)** | **Uniform Series Present Worth Factor (P/A, i, N)** | **Capital Recovery Factor (A/P, i, N)** | |---|---|---|---|---|---|---| | 1 | 1.1800 | 0.8475 | 1.0000 | 1.1800 | 0.8475 | 1.1800 | | 2 | 1.3924 | 0.7182 | 2.1800 | 0.4587 | 1.5665 | 0.6387 | | 3 | 1.8430 | 0.6086 | 3.5243 | 0.2596 | 2.1742 | 0.4599 | | 4 | 2.1738 | 0.5158 | 5.1596 | 0.1719 | 2.7951 | 0.3717 | | 5 | 2.8787 |
Transcribed Image Text:### Project Evaluation using NPW Method A large food-processing corporation is considering using laser technology to speed up and streamline the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,650,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of $200,000. If the company's MARR (Minimum Attractive Rate of Return) is 18%, use the NPW (Net Present Worth) method to justify the project. **Click the icon to view the interest factors for discrete compounding when MARR = 18% per year.** **The NPW of the project is $ ____ thousand. (Round to the nearest whole number.)** #### Interest Factors Table for MARR = 18% | **N** | **Single Payment** | | | **Compound Amount Factor (F/P, i, N)** | **Present Worth Factor (P/F, i, N)** | **Equal Payment Series** | | | | | **Compound Amount Factor (F/A, i, N)** | ** Sinking Fund Factor (A/F, i, N)** | **Uniform Series Present Worth Factor (P/A, i, N)** | **Capital Recovery Factor (A/P, i, N)** | |---|---|---|---|---|---|---| | 1 | 1.1800 | 0.8475 | 1.0000 | 1.1800 | 0.8475 | 1.1800 | | 2 | 1.3924 | 0.7182 | 2.1800 | 0.4587 | 1.5665 | 0.6387 | | 3 | 1.8430 | 0.6086 | 3.5243 | 0.2596 | 2.1742 | 0.4599 | | 4 | 2.1738 | 0.5158 | 5.1596 | 0.1719 | 2.7951 | 0.3717 | | 5 | 2.8787 |
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