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Houston Inc. is considering the purchase of new equipment that will automate production and thus reduce labor costs. Houston made the following estimates related to the new machinery: Click the icon to view the information) Present Value of $1.table Present Value of Annuity of $1 table Future Value of 51 table Future Value of Annuity of S1 table Read the requirements Requirement 1. Calculate (a) net present value. (b) payback period. (c) discounted payback period, and (d) internal rate of return a. Net present value. (Round intermediary calculations to the nearest whole dollar. Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar) The net present value is - x Data table Cost of the equipment $182,000 Reduced annual labor costs $55,000 Estimated life of equipment 5 years Terminal disposal value 50 After-tax cost of capital 10% Tax rate 28% Assume depreciation is calculated on a straight-line basis for tax purposes. Assume all cash flows occur at year-end except for initial investment amounts Print Done Houston Inc. is considering the purchase of new equipment that will automate production and thus reduce labor costs. Houston made the following estimates related to the new machinery: (Click the icon to view the information) Present Value of S1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Calculate (a)net present value, (b) payback period, (c) discounted payback period, and (d) internal rate of return a. Net present value. (Round intermediary calculations to the nearest whole dollar Use factors to three decimal places, XXXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar) The net present value is 1 Requirements 1. Calculate (a) net present value. (b) payback period, (e) discounted payback period, and () internal rate of return 2. Compare and contrast the capital budgeting methods in requirement 1

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