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Considering the acquisition of equipment

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Reference no: EM131009201

(Ignore income taxes in this problem.) Gull Inc. is considering the acquisition of equipment that costs $530,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are:

  Incremental net
cash flows
Year 1 $137,000         
Year 2 $187,000         
Year 3 $148,000         
Year 4 $157,000         
Year 5 $147,000         
Year 6 $127,000         

Click here to view Exhibit 8B-1 to determine the appropriate discount factor(s) using tables.

If the discount rate is 13%, the net present value of the investment is closest to: (Round your final answer to the nearest dollar amount.)

Reference no: EM131009201

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