Question: 1 and 2 are correct, need help on 3&4 Wendell's Donut Shoppe is investigating the purchase of a new $52,000 donut-making machine. The new machine
Wendell's Donut Shoppe is investigating the purchase of a new $52,000 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $6,900 per year, In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,800 dozen more donuts each year, The company realizes a contribution margin of $2.50 per dozen donuts sold. The new machine would have a six-year useful life, Click here to view Exhibit 12B-1 and Exhlbit 128-2, to determine the appropriate discount factor(s) using tables: Requlted: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. What discount foctor should be used to compute the new machine's internal rate of return? (Round your answers to 3 decimal places.] 3. Whatis the new machine's internat rate of rolum? (Rougd your final answer to the nearest whole percentage.) 4. In addition to the data given previously, assume that the machine will have a $16,835 salvage value at the end of six years. Under these conditions, what is the infernal rate of return? (0Aint You may find it helpful to use the net present value approach, find the discount rote that will cause the net present volue to be closest to zero) (Round your final answer to the nearest whole percentage.)
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