Charlie Corporation is considering buying a new donut maker. This machine will replace on old donut maker that still has a useful life of a 6 year. The new machine will cost $3.740 a year to operate, as opposed to the old machine. Which costs S4.150 per year to operate. Also, because 21,400 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $8,400 and the new machine costs $31,400. The incremental annual net cash inflows provided by the new machine would be (Ignore Income taxes).

1. $2,550
2. $3,650
3. $4,950

Answer rating: 100% (QA)

Incremental annual net cash flows is as ... View the full answer