Finance

K2B 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 $240,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. K2B Co. Concludes that it must earn at least a 8% return on this investment. The company expects to sell 96,000 units of the equipment%u2019s product each year. The expected annual income related to this equipment follows.

Sales $ 150,000
Costs
Materials, labor, and overhead (except depreciation) 80,000
Depreciation on new equipment 20,000
Selling and administrative expenses 15,000


Total costs and expenses 115,000


Pretax income 35,000
Income taxes (30%) 10,500


Net income $ 24,500




 

Do You Need A Similar Assignment?

Place an order with us. Our skilled and experienced writers will deliver a custom paper which is not plagiarized within the deadline which you will specify.

Note; 6 Hours urgent orders deliver also available.

If you need more clarifications contact our support staff via the live chat for immediate response.

 

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total: