LaBlanc, Inc., has the opportunity to purchase new equipment that will save the company \($12,000.00\) per year in manufacturing costs. The \($62,000.00\) of equipment is expected to be useful for 8 years, after which it could be sold for \($2,500.00.\) Rosa Pedrillo, accountant, prepared the following analysis and concluded that the company should purchase the equipment.

Evaluate Rosa's analysis to determine whether it is accurate. Did Rosa make the correct decision?

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Annual savings Salvage value Total present value Investment Net present value Cash Flows Present Value Factors Present Values $12,000.00 5.747 $68,964.00 2,500.00 0.540 1,350.00 $70,314.00 62,000.00 $8,314.00