B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The

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B2b Company Is Considering The Purchase Of Equipment That Would Allow The Company To Add A New Product To Its Line The 1 (31.27 KiB) Viewed 26 times

B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $369,600 and has a 8-year life and no salvage value. B2B Company requires at least an 8% return on this investment. The expected annual income for each year from this equipment follows: (PV of $1. EV of $1. PVA of $1. and EVA of 5) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Equipment Selling, general, and administrative expenses Income (a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Compute the net present value of this investment. (Round your present value factor to 4 decimals and other final answers to the nearest whole dollar.) Years 1 through 8 Required B Annual Net Cash Flows Present Value of Annuity at 8% $ 231,000 81,000 46,200 23,100 5 80,700 114 Present Value of Net Cash Flows m Next >