Charlotte Company invests in a new piece of equipment costing $80,000.The equipment is expected to yield the following amounts per year for the equipment's four-year useful life: $\begin{array}{lr}
\text { Cash revenues } & \$ 120,000 \
\text { Cash expenses } & (64,000) \
\text { Depreciation expenses (straight-line) } & (20,000) \
\text { Income provided from equipment } & \$ 36,000\\\text { Cost of capital }&14\%
\end{array}$ What is the net present value of this investment in equipment?

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The Answer of Charlotte Company invests in a new piece of equipment costing $80,000.The equipment is expected to yield the following amounts per year for the equipment's four-year useful life: $\begin{array}{lr}
\text { Cash revenues } & \$ 120,000 \
\text { Cash expenses } & (64,000) \
\text { Depreciation expenses (straight-line) } & (20,000) \
\text { Income provided from equipment } & \$ 36,000\\\text { Cost of capital }&14\%
\end{array}$ What is the net present value of this investment in equipment?

Charlotte Company Invests in a New Piece of Equipment Costing