Exercise 26-9 Computing net present value LO P3 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 $368,000 with a 6-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147,200 units of the equipment's product each year. The expected annual income related to this equipment follows. $ 230,000 Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (20%) Net income 81,000 61,333 23,000 165,333 64,667 12,933 51,734 $ If at least an 10% return on this investment must be earned, compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Answer is complete but not entirely correct. Chart Values are Based on: n = 6 10% Amount X PV Factor Present Value Select Chart Present Value of an Annuity of 1 113,067 X 4.3553= 492,441 $ Present value of cash inflows Present value of cash outflows 492,441 (368,000) 124,439 X Net present value $