B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line.

B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $360,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 144,000 units of the equipment’s product each year. The expected annual income related to this equipment follows. If at least an 8% return on this investment must be earned, compute the net present value. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Sales	$	225,000
Costs
Materials, labor, and overhead (except depreciation)		120,000
Depreciation on new equipment		30,000
Selling and administrative expenses		22,500
Total costs and expenses		172,500
Pretax income		52,500
Income taxes (30%)		15,750
Net income	$	36,750

Compute the net present value of this investment.