Bugle's Bagel Bakery is investigating the purchase of a new bagel maker. This machine would provide an annual operating cost savings of $3,650 for each of the next 4 years. In addition, this new machine would enable the production of a new type of bagel that would result in the sale of 1,500 more dozen bagels each year. The company earns a contribution margin of $0.90 for every dozen bagels sold. The purchase price of this machine is $13,450 and it will have a useful life of 4 years. Bugle's discount rate is 14%. (Ignore income taxes.)

Part A) The total annual cash inflow from this machine for capital budgeting purposes is:

Part B) The internal rate of return of this investment is the closest to:

Part C) The net present value of this investment is closest to:

Answer rating: 100% (QA)

Part A The total annual cash inflow from this machine for capital budgeting purposes can be calculat... View the full answer