FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
Publisher: MCG
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ch 12 #5
The management of Kunkel Company Is considering the purchase of a $26,000 machine that would reduce operating costs by $6500 per year. At the end of the machines five-year useful life, it will have zero salvage value. The companies required rate of return is 16%.
1) determine the net present value of the investment on the machine. 2) what is the difference between the total, undiscounted cash inflows and cash out flows over the entire life of the machine? 
Can you show me how to do this? Also, i don’t know which chart I’m supposed to use.
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ACKMAN: X
O Question 5 - Chapter 12 Home X
O exhibit_12B_1.jpg (1317x951)
mheducation.com/Media/Connect_Production/bne/accounting/brewer_8e/exhibit_12B_1.jpg
EXHIBIT 12B-1 Present Value of $1;
(1+ r)"
15%
16%
17%
18%
19% 20% 21% 22% 23% 24% 25%
Periods 4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
0.962 0,952 0943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800
0.706 0.694 0.683 0.672 0,661 0.650 0,640
1
2.
0925 0907 0890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718
0889 0864 0.840 0.816 0.794 0.772 0,751 0.731 0,712 0,693 0.675 0658 0641 0.624 0,609 0.593 0,579 0,564 0,551 0.537 0,524 0,512
0.499 0.482 0.467 0.451 0.437 0.423 0.410
3
4
0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516
0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.328
0,790 0746 0,705 0,666 0.630 0,596 0564 0,535 0,507 0.480 0456 0432 0410 0,390 0.370 0.352 0.335 0.319 0.303 0289 0275 0262
0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314
0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168
6.
0.296 0.279 0.263 0.249 0.235 0.222 0.210
8.
0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134
0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191
9
10
0.176
0.162 0.149
0137 0.126 0.116 0.107
11
0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0195 0178 0.162
0.148 0135 0123 0112 0103 0094 0.086
0.124 0112 0.102 0.092 0083 0.076 0.069
0.104 0.093 0.084 0.075 0.068 0.061 0 055
12
0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0187
0168 0152 0137
13
0601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0 204 0182 0163 0.145 0130 0.116
14
0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181
0.160 0141
0.125 0.111
0.099 0.088 0.078 0.069 0.062 0055 0.049 0.044
15
0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035
16
0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141
0.123 0.107 0.093 0.081 0.071
0.062 0.054 0.047. 0.042 0.036 0.032 0.028
0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023
0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018
17
18
0.494 0.416 0.350. 0.296 0.250 0.212 0180 0.153 0.130 011
19
0475 0.396 0.331 0.277 0.232 0194 0164 0138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014
20
0.456 0.377 0.312 0.258 0.215 0178
0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012
21
0.439 0.359 0.294 0.242 0199 0.164 0.135 0.112
0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009
22
0.422 0.342 0.278 0.226 0184 0.150 0123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007
0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006
0.390 0.310 0.247 0197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005
23
0.406 0.326 0.262 0.211 0170 0138 0112
24
25
0.375 0.295 0.233 0184 0146 0116
0.092 0.074 0.059 0.047 0.0038 0.030 0.024 0.020 0016
0.013 0.010 0.009 0.007 0.006 0.005 0.004
26
0361 0.281 0.220 0.172
0.135 0106 0084 0066 0.053 0.042 0.033 0.026 0.021 0,017 0.014
0.009 0.007 0.006 0.005 0.004 0.003
27
0.347 0.268 0.207 0.161
0125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0011
0.009 0.007 0.006 0.005 0.004 0.003 0.002
0.333 0.255 0196 0150 016 0,090 0.069 0.054 0.042 0.033 0.026 0.020 0016 0012 0010 0.008 0.006 0.005 0004 0.003 0.002 0.002
28
29
0.321 0.243 0.185 0141
0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002
30
0.099 0.075 0057 0.044 0.033 0026 0.020 0.015 0.012 0009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001
0308 0231 0174
0.131
40
0.208 0142 0.097 0.067 0046 0032 0 022 0015 0.011 0.008 0.005 0.004 0003 0.002 0001
0.001 0.001 0.000 0.000 0.000 0000 0.000
AUG
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Transcribed Image Text:w History
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E TACKMAN: x
6 Question 5 - Chapter 12 Home x
O exhibit_12B_2.jpg (1344x954) x
+
a.mheducation.com/Media/Connect_Production/bne/accounting/brewer_8e/exhibit_12B_2.jpg
EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears;
(1+r
20% 21% 22% 23% 24%
25%
7%
0.962 0.952 0.943 0.935 0.926 0.917
Periods 4%
5%
6%
8%
9%
10%
11%
12%
13%
14% 15%
16% 17%
18% 19%
1
0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800
1.886
1.859
1.833
1.808
1.783
1759 1736
1.713
1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528 1.509 1.492 1.474 1.457 1.440
3
2.775
2.723 2.673
2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1.981 1.952
4
3.630 3.546 3.465 3.387
3.312
3.240 3.170 3.102 3.037 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
4.452
4.329 4.212
4.100
3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689
5.242 5.076 4.917
4.767
4.623
4.486 4.355 4.231 4.111
3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951
6.002 5.786
5.582 5.389 5.206
5.033 4.868 4.712
4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161
8
6.733
6.463
6.210
5.971
5.747
5.535 5.335 5146 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
9.
7435
7108
6.802 6.515
6.247
5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463
10
8.111
7.722
7.360
7.024
6.710
6.418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3.682 3,571
11
8.760 8.306
7.887. 7.499
7139
6.805 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4836 4.656 4486 4.327 4.177
4.035 3.902 3.776 3.656
12
9.385 8.863 8.384
7.943
7.536
7161
6.814 6.492 6194 5.918 5.660 5.421 5.197 4988 4.793 4.611
4.439 4.278 4.127 3.985 3.851 3.725
13
9.986 9.394 8.853
8.358 7.904
7.487 7103
6.750 6.424 6.122 5.842 5.583 5.342 5118
4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780
14
10.563 9.899 9.295 8745
8.244
7.786 7367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4,611
4.432 4.265 4.108 3.962 3.824
6.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 4.315 4.153 4.001 3.859
15
11.118
10.380 9.712
9.108
8.559
8.061 7.606 7191
16
11.652 10.838 10.106
9.447
8.851
8.313 7824 7379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 4189 4.033 3.887
17
12.166 11.274 10.477
9.763
6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 3.910
8.756 8.201 7702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928
9 604 8 950 8.365 7839 7366 6.938 6.550 6.198 5877 5.584 5.316 5.070 4843 4.635 4442 4.263 4.097 3.942
9.122
8.544 8.022 7.549 7120
18
12.659 11.690 10.828 10.059 9.372
19
13.134 12.085 11.158
10.336 9.604
20
13.590 12.462 11.470 10.594 9.818
9.129
8514 7963 7469 7.025 6.623 6.259 5.929 5.628 5.353 5.101
4.870. 4.657 4.460 4.279 4.110 3.954
21
14.029 12.821 11.764
10.836 10.017
9.292 8.649 8.075 7562 7102 6.687 6.312 5.973 5.665 5.384 5127 4891 4675 4.476 4.292 4.121
3.963
22
14.451 13.163 12.042 11.061 10.201
9.442 8.772 8.176 7.645 7170
6.743 6.359 6.011 5.696 5.410 5.149 4909 4.690 4.488 4.302 4.130 3.970
23
14.857 13.489 12.303 11.272
10.371
9.580 8.883 8.266 7718
7.230 6.792 6.399 6.044 5.723 5.432 5.167
4.925 4.703 4.499 4.311
4.137
3.976
24
15.247 13.799 12.550 11.469 10.529 9.707
8.985 8.348 7784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713
4.507 4.318 4.143 3.981
25
15.622 14.094 12.783 11.654 10.675
9.823 9.077 8.422 7843 7.330 6873 6.464 6.0975766 5.467 5195 4948 4.721 4.514
4.323 4.147 3.985
26
15.983 14.375 13.003 11.826 10.810
9.929 9.161
8.488 7.896 7372 6.906, 6.491 6.118
5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988
11.987 10.935 10.027 9.237 8 548 7.943 7.409 6.935 6.514 6.136 5,798 5.492 5.215 4.964 4.734 4.524 4.332 4.154 3.990
27
16.330 14.643 13.211
28
16.663 14.898 13.406 12.137 11.051
10.116
9.307 8.602 7984 7.441
6.961 6,534 6152 5.810 5502 5.223 4970 4.739 4,528 4.335 4.157 3.992
29
16.984 15.141
13.591 12.278 1158
10.198
9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4.159 3.994
17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4160 3.995
30
40
19.793 17159
15.046 13.332 11.925 10.757 9779 8.951 8.244 7634 7105
6.642 6.233 5871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999
AUG
2
8
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