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NEED ANSWERED ASAP PLEASE !! 82B Co. is considering the purchase of equipment that would allow the company to add a new product to its
NEED ANSWERED ASAP PLEASE !!
82B 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 10-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 Sales $ 240,000 Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income 84,000 38,400 24,000 146,400 93,600 18,720 Income taxes (20) Net income $ 74,880 If at least an 8% return on this investment must be earned, compute the net present value of this investment. (PV of$1. E-o $1, PVA of $1 and FVA of $1) (Use appropriate factor(s) from the tables provided.) Chart Values are Based on nE elect Chart PV FactorPresent Val t Value Net present value Step by Step Solution
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