Candy Cups is considering whether to purchase a machine that manufactures cups with names printed on them, or$,$ a bow tying machine. The cup machine will cost $$6,000$ and, over its $5$ year life, will provide net cash inflows of $$1,832$ per year. The bow tier costs $$3,000$ and will save $$792$ net cash outflow per year for $5$ years.

What is the Payback Period for the cup machine?

Question $14$ options:

a$)$

$3\mathrm{.}27$ years.

b$)$

$3$ years.

c$)$

$4$ years

d$)$

$4\mathrm{.}25$ years.

Question $15(1$ point$)$

Candy Cups is considering whether to purchase a machine that manufactures cups with names printed on them, or$,$ a bow tying machine. The cup machine will cost $$6,000$ and, over its $5$ year life, will provide net cash inflows of $$1,832$ per year. The bow tier costs $$3,000$ and will save $$792$ net cash outflow per year for $5$ years.

What is the Payback Period for the bow tier machine?

Question $15$ options:

a$)$

$1\mathrm{.}90$ years.

b$)$

$2$ years.

c$)$

$3\mathrm{.}79$ years.

d$)$

$4$ years.

Question $16(1$ point$)$

Candy Cups is considering whether to purchase a machine that manufactures cups with names printed on them, or$,$ a bow tying machine. The cup machine will cost $$6,000$ and, over its $5$ year life, will provide net cash inflows of $$1,832$ per year. The bow tier costs $$3,000$ and will save $$792$ net cash outflow per year for $5$ years.

If Candy only has the funds for one project, which would they choose according to Payback Period?

Question $16$ options:

a$)$

cup machine; it pays back in less time.

b$)$

bow tier; it pays back in a more time.

c$)$

cup machine; it pays back in more time.

d$)$

bow tier; it pays back in less time.

Question $17(1$ point$)$

Candy Cups thinks that offering delivery will increase their sales. Candy is considering whether to purchase a used delivery truck, or hire a delivery service. The truck will cost $$12,000$ and last roughly $5$ years. The delivery service will charge $$3,600$ per year for the next five years. Candy can borrow from the bank at $8\%.$

What is the Present Value of the truck purchase?

Question $17$ options:

a$)$

$$1,200/$month

b$)$

$$2,400/$year

c$)$

$$12,000$

d$)$

$$18,000$

Question $18(1$ point$)$

Candy Cups thinks that offering delivery will increase their sales. Candy is considering whether to purchase a used delivery truck, or hire a delivery service. The truck will cost $$12,000$ and last roughly $5$ years. The delivery service will charge $$3,600$ per year for the next five years. Candy can borrow from the bank at $8\%.$

What is the Present Value of the delivery service?

Question $18$ options:

a$)$

$$200/$month

b$)$

$$3,600/$year

c$)$

$$14,374$

d$)$

$$18,102$

Question $19(1$ point$)$

An Annuity represents all of the following criteria except:

Question $19$ options:

a$)$

The conversion of a receipt of cash in the future into the value now.

b$)$

Equal payment amounts.

c$)$

Equal time intervals between payments.

d$)$

Constant rate of return.

Question $20(1$ point$)$

Burt's Bonsai Inc. invested $$20,000$ in automatic watering machines. Due to savings in labor costs, Burt's had an incremental increase in annual net income of $$5,000$ per year. The rate of return on the investment in automatic watering machines is

Question $20$ options:

a$)$

$4\%$

b$)$

$40\%$

c$)$

$25\%$

d$)$

$250\%$