Question
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $376,000
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $376,000 and has a 6-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 $ 235,000 Expenses Materials, labor, and overhead (except depreciation) 82,000 DepreciationEquipment 62,667 Selling, general, and administrative expenses 23,500 Income $ 66,833 (a) Compute the net present value of this investment.
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