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X Company is thinking about expanding the production of Product X and eliminating...

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Accounting

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X Company is thinking about expanding the production of Product X and eliminating Product Y. Expanding sales of X should result in additional firm profits of $11,000 per year for the next 7 years, but will require the purchase of some additional equipment, costing $12,000. This equipment should be worth $3,400 at the end of 7 years. By eliminating Product Y, the firm will lose the product's $7,000 annual contribution margin but will save $14,000 of annual fixed costs. Assuming a discount rate of 6%, what is the net present value of expanding the production of Product X and eliminating Product Y ? B: $90,737 \begin{tabular}{l|l} C: $131,569 & D: $190,775 \end{tabular} E: $276,623 F: $401,103

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