Question
B2B Co. is considering the purchase of equipment that would allow the company to add a new product to it's line. The equipment is expected
B2B Co. is considering the purchase of equipment that would allow the company to add a new product to it's line. The equipment is expected to cost $379,200 with a 7-yeae life and no salvage value. It will be depricated on a straight -line basis. B2B Co. concludes that it must earn at least 9% return on this investment. The company expects to sell 151,680 units of the equipment's product each year. The expected annual income related to this equipment follows. (PV of $1, FV of $, PVA of $1, and $FVA of $1)(Use appropriate factors(s) from the tables provided.
Sales. $237,000 Costs. Materials,labor,and overhead(excpt depreciation) 83,000 Depreciation. 54,171 Selling and administrative expenses 23,700
Total costs and expenses. 160,871
pretax income. 76,129 income taxes (30%) 22,839
net income. 53,290
Compute the net present value of this investment. (round "pv factor " to 4 decimal places. round your immediate calculations and final answer to the nearest dollar amount)
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