Exercise 11-9 Computing net present value LO P3

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 $376,000 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 150,400 units of the equipments product each year. The expected annual income related to this equipment follows.

Sales	$	235,000
Costs
Materials, labor, and overhead (except depreciation on new equipment)		82,000
Depreciation on new equipment		47,000
Selling and administrative expenses		23,500
Total costs and expenses		152,500
Pretax income		82,500
Income taxes (40%)		33,000
Net income	$	49,500

If at least an 9% 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 =
i =
Select Chart	Amount	x	PV Factor	=	Present Value
				=	$0
Net present value