Ch12 Review Assignments 2 10 points Prim Wendell's Donut Shoppe is investigating the purchase of a new $33.000 donut mak

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Ch12 Review Assignments 2 10 Points Prim Wendell S Donut Shoppe Is Investigating The Purchase Of A New 33 000 Donut Mak 1 (26.3 KiB) Viewed 10 times

Ch12 Review Assignments 2 10 points Prim Wendell's Donut Shoppe is investigating the purchase of a new $33.000 donut making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5.700 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1300 dozen more donuts each year. The company realizes a contribution margin of $2.60 per dozen donuts soid. The new machine would have a six-year useful ide Click here to view Exhibit 128.1 and Exhibit 128-2 to determine the appropriate discount factors) using tables Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes 2. What discount factor should be used to compute the new machine's internal rate of return? (Round your answers to 3 decimal places) 3. What is the new machine's internal rate of return? (Round your final answer to the nearest whole percentage) 4. In addition to the data given previously, assume that the machine will have a $10,855 salvage value at the end of six years. Under these conditions, what is the internal rate of return? (Hint You may find it helpful to use the net present value approach find the discount rate that will cause the net present value to be closest to zero) (Round your final answer to the nearest whole percentage) 1 Annual cash inflows 2. Discount factor 3 Internal rate of retum 4 Internal rate of retum Savet % %