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Your answer is partially correct. Monty Industries is considering the purchase of new equipment costing $1.220,000 to replace existing equipment that will be sold for
Your answer is partially correct. Monty Industries is considering the purchase of new equipment costing $1.220,000 to replace existing equipment that will be sold for $181,000. The new equipment is expected to have a $207.000 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 39.400 units annually at a sales price of $27 per unit. Those units will have a variable cost of $12 per unit. The company will also incur an additional $93,900 in annual fixed costs. Click here to view the factor table. Calculate the present value of each cash flow assuming an 5% 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 amounts using a negative sign preceding the number eg.-58,971 or parentheses eg. (58,9711) Cash Flow Present Value $ -1220000 181000 Purchase of new equipment Salvage of old equipment Sales revenue Variable costs Additional fixed costs Salvage of new equipment
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