The Pantry Vending Machine Company is looking to expand its business by adding a new line...

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The Pantry Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into either soda machines or snack machines. Following is the relevant financial data relating to the decision: Soda Machines Snack Machines Investment $70,000 Useful life (years) $25,000 12 Estimated annual net cash inflows for useful life $10,000 $17,000 Residual value $10,000 $11,000 Depreciation method Straight-line Straight-line Required rate of return 10% 10% What is the net present value for the snack machines? Present Value of $1 Periods 6% 8% 10% 12% 14% 4 0.792 0.735 0.683 0.638 0.592 5 0.747 0.681 0.821 0.587 0.519 8 0.705 0.630 0.564 0.507 0.466 7 0.665 0.583 0.513 0.452 0.400 8 0.627 0.540 0.467 0.404 0.351 g 0.592 0.500 0.424 0.361 0.308 10 0.558 0.463 0.388 0.322 0.270 11 0.527 0.429 0.350 0.287 0.237 12 0.407 0.397 0.319 0.257 0.208 Present Value of Annuity of $1 Periods 6% 8% 10% 12% 14% 4 3.485 3.312 3.170 3.037 2.914 5 4.212 3.993 3.791 3.605 3.433 8 4.917 4.823 4.355 4.111 3.889 7 5.582 5.208 4.888 4.584 4.288 8 6.210 5.747 5.335 4.968 4.639 9 6.802 8.247 5.759 5.328 4.946 10 7.360 6.710 6.145 5.650 5.216 11 7.887 7.139 6.495 5.938 5.553 12 8.384 7.538 6.814 8.194 5.660 O $25,880 $119,347 $94,347 $53,000 The Pantry Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into either soda machines or snack machines. Following is the relevant financial data relating to the decision: Soda Machines Snack Machines Investment $70,000 Useful life (years) $25,000 12 Estimated annual net cash inflows for useful life $10,000 $17,000 Residual value $10,000 $11,000 Depreciation method Straight-line Straight-line Required rate of return 10% 10% What is the net present value for the snack machines? Present Value of $1 Periods 6% 8% 10% 12% 14% 4 0.792 0.735 0.683 0.638 0.592 5 0.747 0.681 0.821 0.587 0.519 8 0.705 0.630 0.564 0.507 0.466 7 0.665 0.583 0.513 0.452 0.400 8 0.627 0.540 0.467 0.404 0.351 g 0.592 0.500 0.424 0.361 0.308 10 0.558 0.463 0.388 0.322 0.270 11 0.527 0.429 0.350 0.287 0.237 12 0.407 0.397 0.319 0.257 0.208 Present Value of Annuity of $1 Periods 6% 8% 10% 12% 14% 4 3.485 3.312 3.170 3.037 2.914 5 4.212 3.993 3.791 3.605 3.433 8 4.917 4.823 4.355 4.111 3.889 7 5.582 5.208 4.888 4.584 4.288 8 6.210 5.747 5.335 4.968 4.639 9 6.802 8.247 5.759 5.328 4.946 10 7.360 6.710 6.145 5.650 5.216 11 7.887 7.139 6.495 5.938 5.553 12 8.384 7.538 6.814 8.194 5.660 O $25,880 $119,347 $94,347 $53,000