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Cantracom Inc. plans to purchase new oil-field equipment. The companys investment analyst has made the following estimates: New equipment cost, including installation and training $140,000

Cantracom Inc. plans to purchase new oil-field equipment. The companys investment analyst has made the following estimates:

New equipment cost, including installation and training $140,000

Salvage value of new equipment at the end of its useful life $20,000

New equipments useful life 4 years

Annual increase in sales $82,000

Annual increase in costs other than depreciation $19,000

Income tax rate 30%

Discount rate (RRR) 7%

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