Swifty Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for

$150,000. The new equipment is expected to have a $230,000 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 $42 per unit. Those

units will have a variable cost of $22 per unit. The company will also incur an additional $90,000 in annual fixed costs.

Calculate the net present value of the proposed equipment purchase. Assume that Swifty uses a 10% discount rate.

Do you recommend that Swifty Industries invest in the new equipment?

Question 1 of 3 ( -/1.6 E 1 View Policies Current Attempt in Progress Swifty Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for $150,000 The new equipment is expected to have a $230,000 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 $42 per unit. Those units will have a variable cost of $22 per unit. The company will also incur an additional $90,000 in annual foxed costs Click here to view the factor table lal Calculate the net present value of the proposed equipment purchase. Assume that Swifty uses a 10% discount rate. For calculation purposes, une 4 decimal places as displayed in factor table provided and round final answer to O decimal place, eg 58,971. Enter negative amount using i the sign preceding the number eg-59992 or parentheses ea (599923) Net present value S the Do you recommend that Swifty Industries invest in the new equipment? eTextbook and Media Attempts unlimited S >