A new equipment costs $369,600 and has 8 year of life and no salvage value,...
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Accounting
A new equipment costs $369,600 and has 8 year of life and no salvage value, requires 9% return on it's investment, expected annual income for each year (PV of $1, FV of $1, PVA of $1, FVA of $1)
Sales of new product $231,000
Expenses- Materials, labor and overhead (except depreciation)- $81,000
Depreciation-equipment- $46,200
Selling, general, and administrative - $23,100
Income- 80,700
Q1. Compute Net Present Value
Q2.Should the investment be accepted or rejected
Answer & Explanation
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