Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day. He believes that a cold soda machine would be appreciated by his workers, and an appreciated worker is a good worker. He has priced a machine at a national member only warehouse for $1,800. The machine should be usable for 6 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 7 cans a day will be purchased. The plant is open five days a week, 50 weeks a year. A case of soda (24 cans) costs $5.76 and big al believes that a price of $.60 per can would win him good will. What is the estimated annual sales in cans of soda? What is the contribution margin per can of soda? How many cans of soda must be sold each year to break even? Annual incremental cash inflows from the soda machine? what is the payback period in years? If the time value of money is 12% per year, what is the net present value? Use the tables What is the internal rate of return? Pick the closes interest rate from the tables

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