50.1K

Verified Solution

Link Copied!

0 1 Saved Help Save & Exit Jojola Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 5 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the initial investment and the annual operating cash cost is -$439,238. Management is having difficulty estimating the annual benefit of having the aircraft and estimating the salvage value of the aircraft. (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2. to determine the appropriate discount factor(s) using the tables provided. Ignoring any salvage value, to the nearest whole dollar how large would the annual benefit have to be to make the investment in the aircraft financially attractive? Help O $57101 O $439,238 O S124,890 O $87,848 unnect Production/bne/accounting/Garrison_16e/exhibit_13B_1.jpg EXHIBIT 13B-1 Present Value of $t Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0935 0.926 0917 0.909 0.901 0.893 0.885 0.877 0.870 0.362 0.855 0.847 0.840 0.833 0826 0.820 0813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.540 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0659 0.636 0.613 0.592 0.572 0.552 0.534 0.515 0.499 0.482 04670451 0.437 0.423 0410 5 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 6 7 8 9 10 0.790 0.746 0.705 0.666 0.630 0.506 0.564 0.535 0.507 0.480 0456 0.432 0.410 0.390 0.370 0352 0.335 0.319 0.303 0.289 0.275 0.262 0.750 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 0314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 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 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 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0.475 0.429 0.388 0.50 0.317 0.287 0.261 0.237 0.215 0.195 0.17 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.003 0.076 0.069 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0088 0078 0.069 0062 0.055 0.049 0.044 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0065 0.057 0.051 0.045 0.040 0.035 11 12 13 14 15 21 16 0.534 0.458 0.394 0.339 0.292 0.252 0218 0.18 0.163 0.141 0.123 0.107 0.003 0.081 0.071 0.062 0054 0.047 0042 0.036 0.032 0.028 0 513 0.436 0.371 0317 0 270 0231 0 10R 0 120 0 146 0.125 000 000 0000 0.060 000 0052 0045 0039 0034 0030 0.025 0.023 18 0.494 0.416 0 350 0295 0.250 0212 0 180 0153 0110 0111 0005 OOR1 000 0059 0 051 0044 003 0032 0028 0024 002 0018 19 0.475 0.396 0.331 0 277 0 232 0.194 0.164 0.138 0 116 0098 0083 0070 0.060 0051 0043 0.037 0031 0027 0023 0.020 0017 0014 20 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0073 0.061 0.051 0.043 0.037 0.031 0.026 0022 0019 0016 0.014 0.012 0.439 0.350 0.294 0 242 0.199 0.164 0.135 0.112 0.003 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0015 0013 0.011 0.009 0.422 0.342 0.278 0.226 0.184 0.150 0.125 0.101 0.003 0.068 0.056 0.046 0038 0.032 0.025 0.022 0018 0.015 0013 0.011 0.000 0.007 23 0.406 0326 0 262 0211 0.170 0.138 0 112 0091 0074 0.060 0 040 0040 0033 0.027 0.022 0.018 0015 0012 0010 0000 000 0005 24 0.390 0.310 0247 0.197 0.158 0.126 0102 002 006 005 004 003 002 003 010 0015 0013 0010 OOO OOO 0005 0005 0.375 0.295 0.233 0.14 0.146 0.116 0.002 0.074 0.050 0.047 0.038 0.030 0.024 0.020 0.0160.013 0.010 0,009 0.007 0.005 0.005 0.004 26 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0033 0.026 0.021 0.017 0.014 0.011 0.000 0.007 0.006 0.005 0.004 0.003 0.347 0.268 0.207 0.161 0125 0.098 0076 0060 0.047 0037 0 029 0023 0018 0.014 0.01 0.009 0.007 0.006 0.005 0.004 0.003 0.002 2 03 0255 016 0150 116 0000 000 0054 0042 003 0026 00200016 0012 0010 000 000 0005 0004 0003 002 0002 20 021 0243 015 0141 0.107 OB 0063 004 003 0029 002 0012 0014 0011 000 000 000 0004 003 002 0002 002 30 0.308 0231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0020 0015 0012 0009 0.007 0.005 0004 0.003 0.003 0.002 0.002 0.001 400 208 0.142 0.007 0067 0046 0032 0022 0.015 0011 0008 0.005 0.004 2003 2002 0001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 13B-2 Present Value of an Annulty of Sin Arrears. 11- Periods 1 2 3 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 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 0.313 0.806 0.800 1.886 1.859 1.833 1.808 1783 1759 1.736 1.713 1690 1.668 1.647 1626 1605 1585 1566 1.547 1528 1509 1492 1.474 1457 1440 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2322 2283 2246 2210 2.174 2.140 2.106 2.074 2.042 2011 1981 1952 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2855 2.798 2743 2.690 2639 2 589 2.540 2494 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 2926 2.864 2.803 2.745 2.689 5 7 11 6 5242 5076 4917 4 767 4623 4.486 4355 4231 4.111 3.998 3.889 3.784 3685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2951 6.002 5.786 5582 5.3895206 5033 4868 4712 4564 4.423 4288 4160 4039 3922 3812 3706 3.605 3.508 3.416 3327 3242 3161 8 6.733 5.463 6210 5.971 5.7475.535 5.335 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 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4451 4303 4.163 4031 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 5889 5650 5.426 5.216 5.019 4833 4659 4494 4339 4. 192 4.054 3.923 3.799 3.682 3.571 8.760 8.306 7.887 7.499 7.1296.805 6.495 6.207 5.938 5.687 5453 5.234 5.029 48364656 4486 4327 4.177 4035 3.902 3776 3656 12 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.492 6.194 5.918 5.660 5.421 5.197 4988 4.793 4611 4439 4278 4.127 3.985 3.851 2725 13 9 985 9.394 8.853 358 7904 7.487 7.103 6.750 6.424 6.122 5.842 5,583 5342 5.1184.910 4715 4533 436 4203 4053 3912 170 14 10.563 9.899 9.295 8.745 82447.786 7.367 6982 6.628 6,302 6.002 5.724 5.468 5220 5008 4 802 4611 4432 4.265 4.108 3.962 3824 15 11.118 10.380 9.712 9.108 8.559 8,061 7.606 7.191 6,811 6.462 6.142 5.847 5.575 5 324 5.092 4876 4675 4489 4.315 4.153 4001 3.859 16 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 6,604 6.265 5.954 5.668 5.405 5.162 4.938 4730 4536 4357 4.189 4.033 2007 17 12.166 11 274 10.477 9763 9.122 8.544 8.022 7549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4900 4775 4.576 4.391 4219 4059 1910 18 12 659 11 690 10 828 10.0599372 8 756 8 201 7.702 7.250 6.840 6.457 6.128 5.18 5 514 5.273 5021 48124608 4419 42434080 1928 19 13 134 12085 11.158 10 336 9604 8950 365 7.839 7366 690 6550 198 5877 5584 5 316 5070 4843 4635 4.442 4263 4097 192 2013 590 12 452 11 470 10 594 98189 129 8514 7963 2469 7025 6622 6259 5029 5628 51535.101 4870 4657 4450 62794110 1054 21 14.029 12.821 11.764 10.836 10 017 9292 8649 8075 7.562 7.102 6.687 6312 5 973 5.665 5.384 5.127 4 891 4675 4.475 429241213 14451 13.163 12042 11 061 10 2019 442 87728 176 7645 7.170 6743 5 359 6 011 5696 5410 5149 409 4690 488 4102 410019 14 857 13.489 12 303 11 272 10 371 9580 3.883 8256 7.718 7230 6.792 6 399 6044 5723 5.632 5 1674925 4703 4199 41 17 19 15 247 13.799 12.550 11469 10529 9.707 8085 8 348 7.784 7.283 6835 5.434 6073 5746 5.451 5.182 4937713 507 318 319 15.622 14 094 12.783 11654 10.675 98239.077 8.422 7843 7.330 6.873 6.454 60975.766 5.467 5.1954 943 721 45144123 4107 31 15 983 14 375 13003 11 825 108109929 161 848 7896 7372 6 906 5.091 6118 5783 5430 5.20649567284530 151 103 16 330 14 643 13 211 11 987 10 935 10.027 9 237 358 7903 7609 6 935 5514 615 5 798 5.092 5.215 4734454 22 4154390 16.663 14898 13 406 12.137 11051 10.116 307 3 602 7.984 7.641 5.961 6534 6.1525510 5 502 52234970739 528 335 4157392 16.984 15.141 13591 12.278 11.158 10.1989 370 8650 8.022 7470 6.983 6551 5160 5.20 5510 5.2294975 44 4531 337 41534 17.292 15 372 12 765 12 409 11258 10.274 9.427 3.694 8.055 7.496 7.003 5 566 5 177 5.529 5517523549794545344 333 4103095 19.793 17 159 15046 1333211925 10.757 9.779 8951 8244 7634 7. 105 6642 6 233 587 5 5 5.258 4997 4750 454 4347 41663999 40

Answer & Explanation Solved by verified expert

See Answer