Alcorn Company is considering purchasing equipment that costs $400,000. The equipment has an estimated useful life of 8 years and no salvage value. Alcorn believes that the annual cash inflows from using the equipment will be $80,000.(PV of $1and PVA of $1) (Use appropriate factor(s) from the tables provided.)Required:Calculate the net present value of the equipment assuming that Alcorn's cost of capital is 12%. Is the equipment an acceptable investment?Calculate the net present value of the equipment assuming that Alcorn's cost of capital is 10%. Is the equipment an acceptable investment?What general conclusion can you reach from your results to parts 1) and 2)?

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The Answer of Alcorn Company is considering purchasing equipment that costs $400,000. The equipment has an estimated useful life of 8 years and no salvage value. Alcorn believes that the annual cash inflows from using the equipment will be $80,000.(PV of $1and PVA of $1) (Use appropriate factor(s) from the tables provided.)Required:Calculate the net present value of the equipment assuming that Alcorn's cost of capital is 12%. Is the equipment an acceptable investment?Calculate the net present value of the equipment assuming that Alcorn's cost of capital is 10%. Is the equipment an acceptable investment?What general conclusion can you reach from your results to parts 1) and 2)?

Alcorn Company Is Considering Purchasing Equipment That Costs $400,000