AP9-12 Comprehensive Capital Budgeting Problem [LO 2,6] Van Doren Corporation is considering producing a new product, Autodial. Marketing data indicate that the company will be able to sell 60,000 units per year at $30. The product will be produced in a section of an existing factory that is currently not in use. To produce Autodial, Van Doren must buy a machine that costs $550,000. The machine has an expected life of 5 years and will have an ending residual value of $15,000. Van Doren will depreciate the machine over 5 years using the straight-line method for both tax and financial reporting purposes. In addition to the cost of the machine, the company will incur incremental manufacturing costs of $480,000 for component parts, $528,000 for direct labor, and $270,000 of miscellaneous costs. Also, the company plans to spend $150,000 annually to advertise Autodial. Van Doren has a tax rate of 40 percent, and the companys required rate of return is 14 percent. Compute the net present value. (Round present value factor calculations to 4 decimal places, e.g. 0.2525. Round other all calculations and the final answer to 0 decimal places, e.g. 5,250.) Net present value = $ ____________ Compute the payback period. (Round all calculations and the final answer to 2 decimal places, e.g. 25.21.) Payback period = __________ years Compute the accounting rate of return. (Round the final answer to 0 decimal places e.g. 25%.) Accounting rate of return = _______ % Should Van Doren make the investment required to produce Autodial? Yes or No