B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $382,400 and has a 4-year life and no salvage value. B2B Company requires at least an 9% return on this investment. The expected annual income for each year from 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 of new product	$ 239,000
Expenses
Materials, labor, and overhead (except depreciation)	84,000
DepreciationEquipment	95,600
Selling, general, and administrative expenses	23,900
Income	$ 35,500

(a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value?

Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $131,600. Project 2 requires an initial investment of $98,100. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Annual Amounts	Project 1	Project 2
Sales of new product	$ 106,200	$ 83,400
Expenses
Materials, labor, and overhead (except depreciation)	70,850	34,880
DepreciationMachinery	18,800	19,620
Selling, general, and administrative expenses	8,720	21,800
Income	$ 7,830	$ 7,100

Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.)

GTO Incorporated is considering an investment costing $214,720 that results in net cash flows of $32,000 annually for 10 years. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) (a) What is the internal rate of return of this investment?

Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 the nearest whole dollar.) Years 1 through 4 Net present value Annual Net Cash Flows X Present Value of Annuity at 9% = = Present Value of Net Cash Flows SA 0 Years 1-7 Project 1 Net present value Years 1-5 Project 2 Net present value Net Cash Flows x Net Cash Flows x Present Value of Annuity at 10% = = Present Value of Annuity at = 10% = Present Value of Net Cash Flows $ 0: Present Value of Net Cash Flows $ 0 a. Internal rate of return %