B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $382,400 with a 6-year life and no salvage value. It will be depreciated on a straight-line basis. B2B Co. concludes that it must earn at least a 9% return on this investment. The company expects to sell 152,960 units of the equipments product each year. The expected annual income related to this equipment follows. (PV of $1, FV of $1, PVA of $1, and FVA of $1)

(Use appropriate factor(s) from the tables provided.)

Sales $ 239,000

Costs Materials, labor, and overhead (except depreciation)

84,000 Depreciation on new equipment 63,733

Selling and administrative expenses 23,900

Total costs and expenses 171,633

Pretax income

67,367 Income taxes (20%)

13,473 Net income $ 53,894