1. A new machine costing $250,000 will yield cash savings of $40,000 each year for ten years. In addition, it is anticipated that the new machine will increase productivity and that the company will experience an increase in contribution margin as a result. What annual dollar inflow from increased contribution margin would the company have to experience to make the machine an acceptable investment if the minimum desired rate of return is 14% (round your answer up to the nearest whole dollar)?

		a. $9,253
		b. $7,929
		c. $6,738
		d. $8,917

2.

The payback period of an investment is a good alternative to the use of net present value analysis to determine whether a potential investment will be profitable for the company.

		a. True
		b. False