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A company is considering buy a piece of equipment for $250,000. If purchased, the equipment will increase revenue by $57,845 each year for six years.

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A company is considering buy a piece of equipment for $250,000. If purchased, the equipment will increase revenue by $57,845 each year for six years. The company's cost of capital is 11%. Ignore depreciation and taxes. a. What is the Net Present Value of the equipment? b. Should the company buy the equipment? 6 periods PV of $1 FV of $1 PV annuity FV annuity 11% 0.53464 1.87041 4.23054 7.91286

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