IntemalRate of Return Method$=$Two Projects

Munch $N^{**}$ Crunch Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $$45,728.10$ and could be used to deliver an additional $45,000$ bags of pretzels per year. Each bag of pretzels can be sold for a contribution margin of $$0\mathrm{.}58.$ The delivery truck operating expenses, exeluding depreciation, are $$0,52$ per mile for $15,000$ miles per year. The bagging machine would replace an old bagging machine, and its net investment cost would be $$37,417,50.$ The new machine would require three fewer hours of direct labor per day. Direct labor is $$15$ per hour. There are $250$ operating days in the year. Both the truck and the bagging machine are estimated to have six$-$year lives. The minimum rate of return is $19\%.$ However, Munch $N^{\text{'}}$ Crunch has funds to invest in only one of the projects.

Present Value of an Annuity of $$1$ at Compound Interest

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