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B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $372,800
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $372,800 and has a 6-year life and no salvage value. B2B Company requires at least an 10% 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.) $ 233,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income 82,000 62, 133 23,300 $ 65,567 (a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals and other final answers to the nearest whole dollar.) Annual Net Cash Flows Present Value of Annuity at 10% = Present Value of Net Cash Flows Years 1 through 6 Net present value Required A Required B > B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $372,800 and has a 6-year life and no salvage value. B2B Company requires at least an 10% 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.) $ 233,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income 82,000 62, 133 23,300 $ 65,567 (a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Should the investment be accepted or rejected on the basis of net present value? Should the investment be accepted or rejected on the basis of net present value?
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