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 $379,200 with a 4 year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 151,680 units of the equipment's product each year. The expected annual income related to this equipment follows. $ 237.000 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 (301) 83,000 94.800 23.700 201, 500 35,500 10, 650 $ 24,850 Net income 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: Select Chart Amount * PV Factor - Present Value TABLE B.1" Present Value of 1 p=1/(1+i)" Rate 4% 5% 6% 7% 8% 9% 10% 12% 15% 09901 09804 0979 09615 09524 004 035 09259 09174 09091 0929 09803096120426 0.9246 0.9070 0 0 03734 0157308417 0.8264 07972 09705 0.9423 0.9151 0.90 0.8638 08306 08163 029180 7722 0.7513 07118 09610 09238 ORAS 00S 0.0227 0 1921 07629 07750 0084 06830 06.255 OOS 0057 0 0 82190725 0 7471 07130 06060669006209 05674 0900 0 79007052 0 5661 0530205951 05645 05066 09177 03706 131 070 071070651 05227 015 050 05132 06523 0.9275 08515 0714 0.7307 0675 05278 054003 05019 06665 0.0019 091430.8.368 0.7664 0.7026 06446 09019 05439 050020 4604 0.4241 03506 0.0053 08203 07041 06156 0.6139 O O K 04632 0.4224 0255 03220 061 000 0.72240606 5847 0526404751 0421903875 0.3505 0.2875 O 078 07014 066 068 06920 OOO 07971 055 3186 02957 0317 072006810 06006050 0.415003677 0 0 22 0.2292 05700 57900611 05775 0.5051 0.4423 018 0 105 0292 02633 02065 0.003 0.7430 05419 0555 0. 0 0.6173 0.3624 07152 02705 024 0127 0528 0.72606232 059 0581 09 03387 02919 02519 0.21 0.1671 O 07162 00 051 0461 071 03166 0 2700 0 2311 0.1978 0.1056 1600100) 487 04195 010 02950 02502021201799 100 01277 0 0 570) 4 0205 02171 0.165 1161 03195 0679005537 0856407750 01110354 021501784 01 02 07798 00 0.4776 0375102953 02330 1842 1460 0.1160 00923 005 0.749 05521 0412001083 0.2314 0 1741 1314 0009400754 0.0573 00334 00 0 5000 09 02534 01813 01301 00937 00676 00400 00356 0019 0671706529 0006 20000000026 066000300221 0107 08596 07561 06575 0571 04972 0.4323 013759 01269 0.2843 0.2472 0.2149 0.1869 01525 0.1013 021229 0.1069 0.0929 000 0703 00611 00304 0.0151 00075 000 0 TABLE B.2 Future Value of 1 = (1 + i)" Rate Periods 1% 2% 3% 4% 5% 6% 8% 9% 10% 125 15% 14025 14785 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 1.0000 10100 10200 10300 10400 1000 1000 10700 1 DO 10000 1.1000 1.1200 1.1500 10201 10404 1060910816 1.1025 1.1235 149 1.1664 11881 1 2100 1254 13225 3 1010310612 10927 1.129 1.1576 1.1910 12250 1.2597 1 2950 13310 1.4049 15209 4 104061024 1.1255 1.169912155 12625 1 1108 13605 1.4116 11541 15735 1190 10510 1.1041 1.1593 12167 12252 132 1.6691 15786 15105 1.7523 20114 10615 1.1252 1941 1.265) 11801 1.4185 1.5007 15869 16771 17716 1.9738 2.3131 10721 1.1487 1.2299 13159 16071 15035 1 6058 1.7138 1.8200 197 22107 26600 1 029 1.1717 1.2668 1.3636 1475 15938 1.7182 1.8509 1 9926 2146 2.4750 3.0590 10937 1.1951 13048 1.4233 15513 16895 1.8385 1.9900 2.1719 27579 2 7731 3.5179 1.1046 1.2190 13439 1402 15209 17903 1 9672 21589 2.1589 21674 29937 25937 3.1058 40456 1.1157 12434 1.3842 1.53951 7103 18983 21049 23316 25804 2571 1126 1268214258 16010 1.750 2.0122 22522 25182 28127 11334 33960 5.7503 1.1301 1.2936 14685 16651 1856 2.1329 24099 27196 0658 16523 43515 6.1528 11095 1.3195 15125 17317 19799 22609 225785 2.9312 3417 4.8871 7.0757 15 1161119 15 109 2010 2005 3.1722 16425 50725 31371 16 1172613728 15047 170 21829 29522 390350 5.1304 93575 101 11002 16528 199 2292026929 31 37000 1216 5 05.05 5 9560 107513 161 162 17024 2025 2006 28543 33799 3.9900717155539 76900 12175 2011 11568 7535 21058 25270 3.0256 35165 3157516171159 35129 2318 2012202 19 13061 221911 2513 46510 560 5775 05057 15465 1224 15106 2.0938 209 2919 5.4274 5 34 621 10 307 170001 32.9190 17478 13114 24273 1201 121957 75123100627 132077 5 17H 299599 14156 55 2113 1998 20130515516076661 106766 147 204140 0 20 104 527996321755 14 27000 2620 4301070000 10 257 149745 21.72453110945 2593 9310510 2673635 other o the 30 and 230 cuand p le Watch o the Value y theme dney