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SIS SIS Question IX: 10 Boniakuru company is trying to decide which of two new product lines to introduce in the coming year. The company

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SIS SIS Question IX: 10 Boniakuru company is trying to decide which of two new product lines to introduce in the coming year. The company requires a 12% return on investment. The predicted revenue and cost data for each product line follows: Product All Product Unit sales 50,000 40,000 Unit sales price Direct materials $140,000 $110.000 Direct labor $150,000 $60.000 Other cash operating expenses $185,000 S130,000 New equipment costs S1.500.000 $760,000 Salvage Value 0 Estimated useful life 10 years 8 years The company has a 40% tax rate and it uses the straight-line depreciation method. Compute the net present value for each piece of equipment under each of the two product lines. Which, if either of these two investments is acceptable

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