Blossom Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment:

Old Equipment

New Equipment

Cost

$80,400

Cost

$38,400

Accumulated depreciation

$41,700

Estimated useful life

8 years

Remaining life

8 years

Salvage value in 8 years

$5.000

$30,900

Current salvage value

$10,680

Annual cash operating costs

Salvage value in 8 years

$0

Annual cash operating costs

$36,000

Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $5,000.

(c)

Calculate the net present value assuming a 12% rate of return. (Ignore income taxes.) (If the net present value is negative, use either a negative sign preceding the number eg. -45 or parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answer to O decimal places, eg. 5,275.)

Net present value ?

View Policies Show Attempt History Current Attempt in Progress Blossom Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Depreciation is \\( \\$ 10,050 \\) per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of \\( \\$ 5,000 \\). Calculate the net present value assuming a 12\\% rate of return. (Ignore income taxes.) (If the net present value is negative, use either a negutive sign preceding the number eg. -45 or parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answer to 0 decimal places, eg. 5,275.) Click here to view the factor table. Net present value Assistance Used Attempts: 0 of 2 used (d) State your conclusion on whether the company should purchase the new equipment. The company purchase the new equipment