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 $2,050. 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 8 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 $5.76 and Big Al believes that a price of $.65 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? (rounded to two places, $#.##)
How many cans of soda must be sold each year to breakeven? (Round up to zero places, ###,### cans)
Annual incremental cash inflows from the soda machine? (rounded to two places, $#.##)
What is the payback period in years? (rounded to two places, #.## years)
If the time value of money is 12% per year what is the net present value?
What is the internal rate of return. Pick the closest interest rate from the tables on page 18.