Question: please help im stuck B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line.

please help im stuck
please help im stuck B2B Co. is considering the purchase of equipment
that would allow the company to add a new product to its

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 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 144,000 units of the equipment's product each year. The expected annual income related to this equipment follows. (PV of $1. FV of $1. PVA of $1. and FVA of S1) (Use appropriate factor(s) from the tables provided.) $ 225,000 Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total coats and expenses Pretax income Income taxes (30) Net income 120,000 30,000 22,500 172,500 52,500 15, 250 $ 36,750 If at least an 8% return on this investment must be earned, compute the net present value of this investment. Chart Values are based on n i= Select Chart Amount X PV Factor Present Value Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (308) Net income 30,000 22,500 172,500 52,500 15,750 $36,750 If at least an 8% return on this investment must be earned, compute the net present value of this investment. Chart Values are Based on: na Select Chart Amount X PV Factor Present Value Net present value

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!