A Company Is Trying to Decide Which of Two New

A company is trying to decide which of two new product lines to introduce in the coming year.The company requires a 12% return on investment.The predicted revenue and cost data for each product line follows:
$\begin{array}{l}\begin{array}{lll}& \underline { \text { Product A } }& \underline { \text { Product B } }\\ \text { Unit sales } &25,000 & 20,000 \\ \text {Unit sales } &\$ 30 & \$ 30\\\\\text { Direct materials } & \$ 15,000 & \$ 8,000 \\\text { Direct labor } & \$ 120,000 & \$ 80,000 \\\text { Other cash operating expenses } & \$ 30,000 & \$ 25,000\\\\\text { New equipment costs } & \$ 2,500,000 & \$ 1,500,000 \\\text { Estimated useful life (no salvage) } & 5 \text { years } & 5 \text { years }\end{array}\end{array}$ The company has a 30% tax rate and it uses the straight-line depreciation method.The present value of an annuity of 1 for 5 years at 12% is 3.6048.Compute the net present value for each piece of equipment under each of the two product lines.Which, if either, of these two investments is acceptable?