+ Chapter 9 Exercises 2,3,4,7,10,11 & Problems 23,25 Question 4 of 8 0.5/1 Show Attempt History Current Attempt in Progress Your answer is partially correct. IN 0.241 1.544 Riverbed Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for $120,000. The new equipment is expected to have a $180,000 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 25.000 units annually at a sales price of $45 per unit. Those units will have a variable cost of $22 per unit. The company will also incur an additional $90,000 in annual fixed costs. Click here to view the factor table. (a) Calculate the net present value of the proposed equipment purchase. Assume that Riverbed uses a 10% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to decimal place, es. 58,971. Enter negative amount using a negative slyn preceding the number es. -59,992 or parentheses es. (59,9921) 2 112 NAV 21 4.30 Net present value 5 0 23 75 4 1.00 SIA (b) Do you recommend that Riverbed Industries invest in the new equipment? TAY ATTS Yes e Textbook and Media