WHAT AM I MISSING?

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 $371,200 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 148,480 units of the equipment's product each year. The expected annual income related to this equipment follows. $ 232,000 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 (40%) Net income 81,000 30,933 23,200 135, 133 96,867 38,747 58,120 $ If at least an 8% 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.) Chart Values are Based on: Select Chart Present Value of an Annuity of 1 8 % Amount x 89,053 x PV Factor = 7.5360 = Present Value $ 671,103 $ 1 $ Present value of cash inflows Present value of cash outflows Net present value 671,103 371,200