Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 5 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 9 cans a day will be purchased. The plant is open five days a week, 50 weeks per year. A case of soda (24 cans) costs $5.52 and Big Al believes that a price of 5.80 per can would win him good will. What is the estimated annual sales in cans of soda? {17.01) What is the contribution margin per can of soda? (rounded to two places, $#.#) {17.02) How many cans of soda must be sold each year to breakeven? (Round up to zero places, #####cans) {17.03) Annual incremental cash in flows from the soda machine? (rounded to two places, S#.##) {17.04) What is the payback period in years? (rounded to two places, #.#years) {17.05) If the time value of money is 12% per year what is the net present value? Use the tables on page 18. {17.06) What is the internal rate of return. Pick the closest interest rate from the tables on page 18. {17.07}
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started