B2B Company is considering the purchase of equipment that would allow the company to add a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) $ 231,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses 81,000 46, 200 23,100 $ 80,700 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? 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, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) $ 231,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses 81,000 46, 200 23,100 $ 80,700 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?
Expert Answer:
Answer rating: 100% (QA)
a Time period8 years Rate 8 Initial investment369600 For 8 years the following cash flows occurred Y... View the full answer
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $ 360,000 with a 6-year life and no salvage value ....
-
MLM Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $324,000 with a 12-year life and no salvage value ....
-
K2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $240,000 with a 12-year life and no salvage value ....
-
Write the shear and momentfunctions and draw shear and moment diagrams for the following frames: (a) Support A is a roller, B and C are fixed and support C is a pin.
-
Dylan Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the companys fiscal year). May 1 Prepared...
-
Rico Samuels employer receives a creditor garnishment order to withhold $80 from Samuels paycheck each week. This week his disposable earnings were $300. How much will the employer withhold from this...
-
Smart Manufacturing Systems Pty Ltd provides the following information. Required (a) Calculate total manufacturing costs for the period ending 30 June 2025. (b) Calculate cost of goods manufactured...
-
LaSalle Bank loaned $8 million to Cypress Creek to build an apartment complex. The loan was secured by a mortgage. Cypress Creek hired contractors to provide concrete work, plumbing, carpentry, and...
-
1.If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency...
-
Recall the following details about the two employees hired in November. a. CPP is deducted at 5.10% (considering $3,500 yearly exemption). b. EI is deducted at 1.62% of gross earnings. c. Both...
-
10. How, if at all, has the Patriot Act modified this balance? 11. What were "sneak and peek" searches originally used for, and how has their legal status and definition changed since 9/11? 12. List...
-
Fill in the blanks: The __________ annotation allows annotations from a superclass to be applied to a subclass, while the __________ annotation determines whether annotations are present in generated...
-
What modifier is used to mark an annotation element as optional? A. optional B. default C. required D. value E. case F. None of the above.
-
What is the result of compiling and running the following application? A. It prints two lines. B. It prints three lines. C. One line of code does not compile. D. Two lines of code do not compile. E....
-
What is the result of the following when called as java Binary.java? A. [] B. [0, 01, 1, 10] C. [0, 01, 10, 1] D. [0, 1, 01, 10] E. The code does not compile. F. The code compiles but throws an...
-
Which statements best describe the result of executing this code? (Choose two.) A. The println() causes one line of output. B. The println() causes two lines of output. C. The println() causes three...
-
A positive charge of 3.0 C is pulled on by two negative charges . One negative charge, -2.0 C, is 0.050 m to the west, and the other, -4.0 C, is 0.030 m east. What net force is exerted on the...
-
Refrigerant R-12 at 30C, 0.75 MPa enters a steady flow device and exits at 30C, 100 kPa. Assume the process is isothermal and reversible. Find the change in availability of the refrigerant.
-
Key figures for Polaris and Arctic Cat follow. Required 1. Compute the debt-to-equity ratios for Polaris and Arctic Cat for both the current year and the prior year. 2. Use the ratios you computed in...
-
Does the balance sheet of Piaggio in Appendix A indicate the identifiable assets owned by its business segments? If so, list them.
-
Refer to Simon Companys financial information in Exercises 17-7 and 17-9. Evaluate the companys efficiency and profitability by computing the following for 2014 and 2013: In Exercise 17-7, Simon...
-
Analogy approach makes people end up building templates rather than building patterns. Explain.
-
Explain the concept behind constructing analysis pattern by using stability approach.
-
What are the advantages of using stability approach over direct and analogy approach?
Study smarter with the SolutionInn App