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Incredible Candy Company is considering purchasing a second chocolate dipping machine in order to expand their business. The information Incredible has accumulated regarding the new machine is: EE (Click the icon to view the information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements $125,000 $23,000 Cost of the machine Increased contribution margin Life of the machine Required rate of return 8 years 4% Incredible estimates they will be able to produce more candy using the second machine and thus increase their annual contribution margin. They also estimate there will be a small disposal value of the machine but the cost of removal will offset that value. Ignore income tax issues in your answers. Assume all cash flows occur at year-end except for initial investment amounts. 1. Calculate the following for the new machine: a. b. c. d. e. Net present value Payback period Discounted payback period Internal rate of return (using the interpolation method) Accrual accounting rate of return based on net initial investment (assume straight-line depreciation) 2. What other factors should Incredible Candy consider in deciding whether to purchase the new machine