Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. lukow products is investigating the purchase of a

Lukow Products is investigating the purchase of a plece of automated equipment that will save...

70.2K

Verified Solution

Question

Accounting

image
Lukow Products is investigating the purchase of a plece of automated equipment that will save $150,000 each year in direct labor and Inventory carrying costs. This equipment costs $740,000 and is expected to have a 5-year useful life with no salvage value. The company's required rate of return is 12% on all equipment purchases. Management anticipates that this equipment will provide Intangible benefits such as greater flexibility and higher quality output that will result in additional future cash inflows. Click here to view Exhibit 148.1 and Exhibit 14B-2. to determine the appropriate discount factor(s) using table. Required: 1. What is the net present value of the piece of equipment before considering its intangible benefits? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $740,000 investment? (Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.) 1 2 Net present value Minimum dollar value

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

As the quality engineer for a small chain of fast food restaurants called McDowell’s (They’ve got...

Statistics
Q

4. After performing a Gram stain on a Gram negative bacteria, the specimen shows purple bacteria....

Biology
Q

A 2.00 mol sample of an ideal gas with a molar specific heat of CV =...

Physics
Q

field engineering is a stressful job, why would you choose it be a field engineering? how do...

Mechanical Engineering
Q

A drop of a patient's blood is placed in pure water, and the red blood...

Biology
Q

Electric Field. Find the electric field between two oppositely charged parallelmetal (capacitor) plates. The charge...

Physics
Q

SolveLancer Test A coil consisting of 400 turns is rotated with an angular velocity of...

Physics
Q

Like an atom when a nucleus is in excited state spontaneously decays to its ground...

Physics
Q

?CUT = ?RATGiven: B is the midpoint of AELA = LELCBA = LDBE

Algebra
Q

Tyrene Products manufactures recreational equipment. One of the companys products, a...

Accounting
Q

A machine with a cost of $10,000 and no salvage value is depreciated straight line...

Accounting
Q

The mortgage on your house in Winnipeg is 5 years old. It required monthly payments...

Finance