Question & Answer: Connor Company is considering purchasing new equipment for $114,000. The expected life of the equipment is 6 years w…..

Connor Company is considering purchasing new equipment for $114,000. The expected life of the equipment is 6 years with no residual value. The equipment is expected to generate revenues of $113,000 per year. Total expenses, including depreciation (calculated using the straight-line method), are expected to be $95,000 per year. Connor management has set a minimum acceptable rate of return of 15%. a. Determine the equal annual net cash flows from operating the equipment. $ b. Calculate the net present value of the new equipment. Use the present value of an annuity of $1 table below. If required, round to the nearest dollar. Enter the cost of equipment with a minus sign. If the net present value is negative, enter the amount using a minus sign. Annual net cash flow $ Present value of cash flows from equipment $ Less cost of equipment $ Net present value of equipment $