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i need some help woth this B2B Co. is considering the purchase of equipment that would allow the company to add a new product to
i need some help woth this
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 12-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 equipment's product each year. The expected annual income related to this equipment follows. $ 231,000 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 (30%) Net income 81,000 30,800 23,100 134,900 96,100 28,830 $ 67,270 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 EVA of $1) (Use appropriate factor(s) from the tables provided.) Chart Values are Based on: no % Amount PV Factor Select Chart Present Value $ = Net present value Step by Step Solution
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