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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
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 $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147.840 units of the equipment's product each year. The expected annual income related to this equipment follows $ 231,eee Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (40%) Net income 81, eee 46, zee 23, 1ee 150,3ee se, ree 32,280 48,420 $ If at least an 9% return on this Investment must be earned, compute the net present value of this Investment. (PV of $1. FV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Chart Values are Based on: NE el 9% Select Chart Amouni x PV Factor = Present Value Present Value of an Annuity of 1 $ 94.620 S 0 Present value of cash inflows Present value of cash outflows Net present value
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