Blossom Inc. manufactures snowsuits. Blossom is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; six months ago, Blossom spent $55,000 to keep it operational. The existing sewing machine can be sold today for $245,925. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $389,000 2 399,000 3 410,000 4 425,000 5 432,000 6 434,500 7 436,000 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,000. This new equipment would require maintenance costs of $94,000 at the end of the fifth year. The cost of capital is 9%. Click here to view the factor table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round present value answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Calculate the net present value. Net present value $ 121,339.25 Determine whether Blossom should purchase the new machine to replace the existing machine? No eTextbook and Media Solution Attempts: 3 of 3 usedCul lumber Inc. wants to purchase a new machine for $3 1.420, excluding $1,300 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,200, and Cul lumber Inc. expects to sell it for that amount. The new machine will decrease operating costs by $?,000 each year of its economic life. The straightline depreciation method will be used for the new machine for a 6year period with no salvage value. Click here to view the factor table. (3) Determine the cash payback period. [Round cash payback period to 2 decimal places, ea. 10.53.] Cash pay back period 4.36 yea rs (bl Determine the app roxi mate internal rate of return. If Round answer to 0 decirrml places, 8.3. 13%. For calculation purposes. use 5 decimal places as displayed in the factor table provided.) Internal rate of return 4.62289 96 (cl Assuming the company has a required rate of return of 8%, determine whether the new machine should be purchased. Theinvestment should V be accepted. eTextbook and Media Save for Later Attempts: 2 Of 3 USEd Submit Answer Blossom Oil Companv is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $120,215 and will increase annual expenses by $65,000 including depreciation. The oil well will cost $400000 and will have a $9000 salvage value at the end of its 10year useful life. Calculate the annual rate of return. [Round answertoOdeclmal places, 9.3. 13%.] Annual rate of return 1236 96 eTextbook and Media Save for Later Attempts: 1 of 3 used Cullumber's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $280,000. A new salon will normally generate annual revenues of $67,975, with annual expenses (including depreciation) of $41,200. At the end of 15 years, the salon will have a salvage value of $77,000. Calculate the annual rate of return on the project. Annual rate of return 6.63 % eTextbook and Media Save for Later Attempts: 2 of 3 used Submit