B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $371,200 and has a 12-year life and no salvage value. B2B Company requires at least an 9% return on this investment. The expected annual income for each year from this equipment follows: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)   Sales of new product $ 232,000Expenses  Materials, labor, and overhead (except depreciation) 81,000Depreciation—Equipment 30,933Selling, general, and administrative expenses 23,200Income $ 96,867(a) Compute the net present value of this investment.(b) Should the investment be accepted or rejected on the basis of net present value?

Fill in the Blank QuestionFill in the blank question.Assume straight-line depreciation and equal cash flows. A company plans to purchase equipment for $25,000. The equipment will have $0 salvage value and increase income by $7,500 annually during its 5-year life. The accounting rate of return is %.

Perit Industries has $180,000 to invest in one of the following two projects:  Project A Project BCost of equipment required $ 180,000   $ 0  Working capital investment required $ 0   $ 180,000  Annual cash inflows $ 32,000   $ 54,000  Salvage value of equipment in six years $ 9,300   $ 0  Life of the project 6 years 6 yearsThe working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 15%.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.Required:Compute the net present value of Project A.Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.Compute the net present value of Project B.Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.Which investment alternative (if either) would you recommend that the company accept?

Information for two alternative projects involving machinery investments follows:   Project 1 Project 2Initial investment $ (124,000) $ (94,000)Salvage value 0 14,000Annual income 13,640 12,960a. Compute accounting rate of return for each project.

Gateway Communications is considering a project with an initial fixed assets cost of $1.53 million that will be depreciated straight-line to a zero book value over the 9-year life of the project. At the end of the project the equipment will be sold for an estimated $242,000. The project will not change sales but will reduce operating costs by $403,000 per year. The tax rate is 23 percent and the required return is 11.7 percent. The project will require $53,000 in net working capital, which will be recouped when the project ends. What is the project's NPV?

Total initial investment capital is 1,500 million VND for equipment. The installation of equipment and preparation for production will be completed by the end of year 0 of the project. The operation of the project will last for 3 years. The life of the equipment is 6 years, the residual value after 6 years is 0. In year 1, the project's revenue is 600 million VND and operating costs (excluding depreciation and interest expenses) are 150 million VND. It is expected that revenue will grow at 10% per year over the life of the project, and operating expenses (excluding depreciation and interest expenses) increase at 8% per year. To finance the project, the investor borrowed 60% of the total initial investment capital from a bank with an interest rate of 10%/year, the principal is paid in 3 years equally starting from the end of year 1. Interest is paid annually; it is calculated on the debt amount owned at the beginning of each year. The equipment is depreciated using the straight-line method and its disposal value is equal to its book value at the end of year 3 and is received at the end of year 3. The corporate income tax rate is 20%. MARR after tax is 10%3) Construct the table to show:a. Before tax cashflowb. Taxable incomec. Tax paymentd. After tax cashflowThank youu