Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment
please help
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 $371,200 with a 10-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 148,480 units of the equipment's product each year. The expected annual income related to this equipment follows. If at least an 9% return on this investment must be eamed, compute the net present value. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Sales $ 232,000 Costs Materials, labor, and overhead (except depreciation on new equipment) 81,000 Depreciation on new equipment 37,120 Selling and administrative expenses 23,200 Total costs and expenses 141,320 Pretax income Income taxes (20%) 90,680 18,136 Net income $ 72,544 Compute the net present value of this investment Chart Values are Based on: Select Chart Amount x PV Factor - Present Value Net present value
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started