Question
B28 Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $377,600
B28 Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $377,600 and has a 6 -year life and no salvage value. B2B Company requires at least an 10% return on this investment. The expected annual income for each year from this equipment follows: (PV or $1. FV of $1, PVA of S1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment selling, general, and administrative expenses Income, $236,000,83,000, 62,933, 23,600, $66467 (a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value?
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