Compute the net present value of this investment

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Question - B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $374,400 and has a 4-year life and no salvage value. B2B Company requires at least an 10% return on this investment. The expected annual income for each year from this equipment follows:

Sales of new product $ 234,000

Expenses

Materials, labor, and overhead (except depreciation) $82,000

Depreciation-Equipment $93,600

Selling, general, and administrative expenses $23,400

Income $35,000

Required - Compute the net present value of this investment.

Reference no: EM133057195

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