Ch.12 Review Assignments 3 10 points eBook Hint Print References seved Lukow Products is investigating the purchase of a

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Ch 12 Review Assignments 3 10 Points Ebook Hint Print References Seved Lukow Products Is Investigating The Purchase Of A 1 (25.14 KiB) Viewed 10 times

Ch.12 Review Assignments 3 10 points eBook Hint Print References seved Lukow Products is investigating the purchase of a piece of automated equipment that will save $140,000 each year in direct labor and inventory carrying costs. This equipment costs $730,000 and is expected to have a 6-year useful life with no salvage value. The company's required rate of return is 16% on all equipment purchases. Management anticipates that this equipment will provide intangible benefits such as greater flexibility and higher-quality output that will result in additional future cash inflows. Click here to view Exhibit 128-1 and Exhibit 128.2. to determine the appropriate discount factors) using table Required: 1. What is the net present value of the piece of equipment before considering its intangible benefits? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $730,000 investment? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) 1. Net present value 2. Minimum dollar value