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PLEASE I NEED IT ASAP Lukow Products is investigating the purchase of automated equipment that will save $110.000 each year in direct labor and inventory
PLEASE I NEED IT ASAP
Lukow Products is investigating the purchase of automated equipment that will save $110.000 each year in direct labor and inventory carrying costs. This equipment costs $760,000 and is expected to have a 8 -year useful life with no salvage value. The company's required rate of return is 10% on all equipment purchases. Management expects this equipment to provide intangible benefits such as greater flexibility and higher-quality output that wil increase future cash inflows 1. What is the net present value of the piece of equipment before considering its intangible benefits? Note: Enter negative omount with a minus sign. Round your final answer to the nearest whole dollor amount. 2. What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $760,000 investment? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollor amount Step by Step Solution
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