32 A company is considering the purchase of a new machine for $54,000. Management predicts that the machine can produce sales of $16.600 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7.400 per year including depreciation of $4,600 per year. Income tax expense is $3,680 per year based on a tax rate of 40%. What is the payback period for the new machine? 3 021445 Multiple Choice 325 years 6.28 years 5.34 years 11.74 years 31 A company is considering the purchase of new equipment for $48,000. The projected annual net cash flows are $20,100. The machine has a useful le of 3 years and no salvage value. Management of the company requires a 11% return on investment. The present value of an annuity of $1 for various periods follows: Period 012434 1 2 3 Present value of an annuity of $1 at 116 0.9009 1.7125 2.4437 What is the net present value of this machine assuming all cash flows occur at year-end? Multiple Choice $16.000 $3,100 30 Carmel Corporation is considering the purchase of a machine costing $46,000 with a 3 year useful life and no salvage value. Carmel uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year, in calculating the accounting rate of return, what is Carmel's average Investment? 012422 Multiple Choice $15,333 $23,000 $20.444 $30,667 29 Vextra Corporation is considering the purchase of new equipment costing $38,000. The projected annual cash inflow is $11,600, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Vextra requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: 12 01:24:09 Periods 1 2 3 4 0.8929 1.6901 2.4018 3.0373 What is the net present value of the machine? Multiple Choice $(35.233) $13,700)