Please just provide the answers that go in the yellow boxes :) B2B Co. is consid
ID: 2478213 • Letter: P
Question
Please just provide the answers that go in the yellow boxes :)
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 5-year life and no salvage value. It will be depreciated on a straight-line basis. B2B Co. concludes that it must earn at least a 9% return on this investment. The company expects to sell 148,480 units of the equipment's product each year. The expected annual income related to this equipment follows. (PV of $1, FV of $1, PVAof $1, and FVAof $1) (Use appropriate factor(s) from the tables provided.) Compute the net present value of this investment. (Round "PV Factor" to 4 decimal places. Round your intermediate calculations and final answer to the nearest dollar amount.)Explanation / Answer
Chart values are based on n= 5 Years i= 9% Select Chart Amount X PV Factor = Present Value Cash Inflow (37492 + 74240) 111732 X 3.8897 = 434,604 Cash Inflow 434,604 Less: Cost of Machine 371,200 Net Present Value 63,404