B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $144,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows.

Sales of new product	$ 90,000
Expenses
Materials, labor, and overhead (except depreciation)	48,000
DepreciationEquipment	12,000
Selling, general, and administrative expenses	9,000
Income	$ 21,000

(a) Compute the annual net cash flow.

Annual Results from Investment	Income	Cash Flow
Sales of new product	$90,000
Expenses
Materials, labor, and overhead (except depreciation)	48,000
DepreciationEquipment	12,000
Selling, general, and administrative expenses	9,000
Income	$21,000
Net cash flow		$0