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B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. expected to cost $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. T to sell 147,840 units of the equipment's product each year. The expected annual income related to this equipment 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 (30%) Net income $ 231,000 81,000 46,200 23,100 150,300 80,700 24,210 $ 56,490 t least an 10% return on this investment must be earned, compute the net present value of this investment. (E factor(c) from the tables provided)

B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. expected to cost $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. T to sell 147,840 units of the equipment's product each year. The expected annual income related to this equipment 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 (30%) Net income $ 231,000 81,000 46,200 23,100 150,300 80,700 24,210 $ 56,490 t least an 10% return on this investment must be earned, compute the net present value of this investment. (E factor(c) from the tables provided)

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 15PB: Urquhart Global purchases a building to house its administrative offices for $500,000. The best...
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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 $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147,840 units of the equipment's product each year. The expected annual income related to this equipment follows. 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 (30%) Net income 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.) Chart Values are Based on: Select Chart n= j= Amount 8 10 % X PV Factor = < Prev 6 of 11 Present Value $ ‒‒‒ I 0 $ 231,000 81,000 46,200 23,100 150,300 80,700 24,210 $ 56,490 Next >
Transcribed Image Text: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 $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147,840 units of the equipment's product each year. The expected annual income related to this equipment follows. 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 (30%) Net income 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.) Chart Values are Based on: Select Chart n= j= Amount 8 10 % X PV Factor = < Prev 6 of 11 Present Value $ ‒‒‒ I 0 $ 231,000 81,000 46,200 23,100 150,300 80,700 24,210 $ 56,490 Next >
Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income 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.) Chart Values are Based on: Select Chart Net present value n= j= Amount 8 10 % X PV Factor = < Prev = Present Value 0 $ ‒‒‒ 6 of 11 m H 23,100 150,300 80,700 24,210 $ 56,490 Next >
Transcribed Image Text:Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income 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.) Chart Values are Based on: Select Chart Net present value n= j= Amount 8 10 % X PV Factor = < Prev = Present Value 0 $ ‒‒‒ 6 of 11 m H 23,100 150,300 80,700 24,210 $ 56,490 Next >
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