Lukow Products is investigating the purchase of automated equipment that will save $140,000 each year...
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Accounting
Lukow Products is investigating the purchase of automated equipment that will save $ each year in direct labor and inventory carrying costs. This equipment costs $ and is expected to have a year useful life with no salvage value. The company's required rate of return is on all equipment purchases. Management expects this equipment to provide intangible benefits such as greater flexibility and higherquality output that will increase future cash inflows.
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using table.
Required:
What is the net present value of the piece of equipment before considering its intangible benefits?
Note: Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.
What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $ investment?
Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.
Net present value
Minimum dollar value
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