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Check my work 7. B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line.
Check my work 7. B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $384,000 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment's product each year. The expected annual income related to this equipment follows. 2 points $ 240,000 eBook Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income 84,000 48,000 24,000 156,000 84,000 25, 200 $ 58,800 Hint Print If at least an 8% return on this investment must be earned, compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Chart Values are Based on: n = Select Chart Amount PV Factor = Present Value Net present value
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