Metro Industries is considering the purchase of new equipment
costing $1,060,000 to replace existing equipment that will be sold
for $180,000. The new equipment is expected to have a $241,000
salvage value at the end of its 4-year life. During the period of
its use, the equipment will allow the company to produce and sell
an additional 32,400 units annually at a sales price of $20 per
unit. Those units will have a variable cost of $14 per unit. The
company will also incur an additional $84,000 in annual fixed
costs.
Identify the amount and timing of all cash flows related to the
acquisition of the new equipment. (Enter negative
amounts using a negative sign preceding the number e.g.
-45.)
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