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 $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147,840 units of the equipments product each year. The expected annual income related to this equipment follows.

Sales	$	231,000
Costs
Materials, labor, and overhead (except depreciation on new equipment)		81,000
Depreciation on new equipment		46,200
Selling and administrative expenses		23,100
Total costs and expenses		150,300
Pretax income		80,700
Income taxes (30%)		24,210
Net income	$	56,490

lf at least an 10% return on this investment must be earned, compute the net present value of this investment. (PVOfSL FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Chart Values are Based on: 102690 Select Chart Amount x PV Factor Present Value Net present value