View + | 125% Zoom Problem 1 Problem 2 T Add Category Insert Problem 3 Problem 4 Table Problem 5 Chart Text Shape Media Comment Collaborate Format Organize Question 5 10 Marks 26 Minutes Besty Inc. has been approached by a vendor regarding an upgrade to a key piece of equipment. The new equipment would provide operating efficiencies for both direct labour and direct materials. The new equipment would result in a total annual savings of $600,000 per year. The new piece of equipment will cost the company $2,400,000 and will be purchased at the beginning of 2021. The old equipment currently has a book value of $100,000 but Besty estimates the fair value of the equipment to be $140,000. The new equipment has a salvage value of $105,000 after its expected useful life of 7 years. Besty requires a 15% after-tax return on its capital investments. The new equipment purchase will require an increase in working capital of $180,000 when the equipment is purchased. This amount will be recovered by the company at the end of the 7 years. REQUIRED Calculate the Net Present Value of this project. Should the project be accepted by the company? Show all calculations. Your Response Nothing selected. Select an object to format.