Solutions for Number 17-24:

17. NPV = PVB – PVC

1= 20,175

2 = 17,698

3 = 15,525

4 = 19,617

5 = 11,945

PVB = 78,960

PVC = 75,000

NPV = 3,959

18. PAYBACK PERIOD = Cash Outlay/Annual Cash Flow

= 55,000/22,000

Payback Period = 2.5 years

19. Between 14% and 16% is the discount rate of the present value is 0

20. AAR = AAP/AAI

AAP = 45,000 -

=15,000

AAI = (Investment – Scrap Value)/2

= (150,000 – 0)/2

= 75,000

AAR = AAP/AAI

=15,000/75,000
AAR= 20%

21. . NPV = PVB – PVC

1= 32,142.85

2 = 78,698.98

3 = 25,624.60

4 = 22,878.93

5 = 20,427.85

6 = 18,238.93

PVB = 147,996

PVC = 150,000

NPV = (2,004)

22. PAYBACK PERIOD = Cash Outlay/Annual Cash Flow

= 100,000/22,000

Payback Period = 4.55 years

23. Between 10% and 12% is the discount rate of the present value become 0.

24. AAR = AAP/AAI

AAP = 25,000 -

=5,000

AAI = (Investment – Scrap Value)/2

= (80,000 – 0)/2

= 40,000
AAR = AAP/AAI

=5,000/40,000

AAR = 12.5%