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Show Attempt History Current Attempt in Progress - Your answer is partially correct. Blue Spruce Industries is considering the purchase of new equipment costing $1.500,000
Show Attempt History Current Attempt in Progress - Your answer is partially correct. Blue Spruce Industries is considering the purchase of new equipment costing $1.500,000 to replace existing equipment that will be sold for $110,000. The new equipment is expected to have a $190,000 salvage value at the end of its 5-year life. During the period of its use, the equipment will allow the company to produce and sell an additional 20,000 units annually at a sales price of $43 per unit. Those units will have a variable cost of $22 per unit. The company will also incur an additional $80,000 in annual fixed costs. Click here to view the factor table. (a) Calculate the net present value of the proposed equipment purchase. Assume that Blue Spruce uses a 10% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to decimal place, eg. 58,971. Enter negative amount using a negative sign preceding the number eg -59.992 or parentheses e.g. (59,9921 Net present value S 1011251 (b) Do you recommend that Blue Spruce Industries nvest in the new equipment e Textbook and Media Attempt of 3 used Sant A O Type here to search
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