Blue Spruce Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $97,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will need a $11,000 overhaul in four years. More important, it does not provide enough capacity to meet customer demand. The company currently produces and sells 15,000 frames per year, generating a total contribution margin of $94,500. Martson Molders currently sells a molding machine that will allow Blue Spruce Pix to increase production and sales to 20,000 frames per year. The machine, which has a ten-year life, sells for $132,000 and would cost $15,000 per year to operate. Blue Spruce Pixs current machine costs only $8,000 per year to operate. If Blue Spruce Pix purchases the new machine, the old machine could be sold at its book value of $5,000. The new machine is expected to have a salvage value of $20,000 at the end of its ten-year life. Blue Spruce Pix uses straight-line depreciation.

View Policies Show Attempt History Current Attempt in Progress Blue Sprucs Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $97,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will need a $11,000 overhaul in four years. More important, it does not provide enough capacity to meet customer demand. The company currently produces and sells 15,000 frames per year, generating a total contribution margin of $94,500. Martson Molders currently sells a molding machine that will allow Blue Sprucs Pix to increase production and sales to 20,000 frames per year. The machine, which has a ten-year lifs, salls for $132.000 and would cost $15,000 per year to operate Blue Sprucs Pix's current machine costs only S8,000 per year to operats. If Blue Spruce Pix purchases the new machine, the old machine could be sold at its book value of $5,000. The new machine is expected to have a salvage value of $20,000 at the end of its ten-year life. Blue Spruce Pix uses straight-line depreciation Click here to view the factor table. (a) Your answer is incorrect. Calculate the new machine's not present value assuminga 16% discount rats. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to decimal place.es. 58.971.) Net present value $ e Textbook and Media Save for Later Attempts: 2 of 3 used Submit Answer (b) Use Excel or a similar spreadsheet application to calculate the new machine's internal rate of return (Round answer to 2 decimal places, eg, 1.25%) Internal rate of return 95 e Textbook and Media Save for later Attempts: 0 of a used Submit Anwar (c) Your answer is incorrect. Calculate the new machine's payback period. (Round answer to 2 decimal places, eg 1.25.) Payback period years e Textbook and Media Save for Later Attempts: 1 of 3 used Submit Anwer APPENDIX 9.1 Present value of $1 received in n periods. Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 16% 18% 20% 1 2 3 4 5 0.9615 0.9246 0.8890 0.8548 0.8219 0.9524 0.9070 0.8638 0.8227 0.7835 0.9434 0.8900 0.8396 0.7921 0.7473 0.9346 0.8734 0.8163 0.7629 0.7130 0.9259 0.8573 0.7938 0.7350 0.6806 0.9174 0.8417 0.7722 0.7084 0.6499 0.9091 0.8264 0.7513 0.6830 0.6209 0.9009 0.8116 0.7312 0.6587 0.5935 0.8929 0.7972 0.7118 0.6355 0.5674 0.8850 0.7831 0.6931 0.6133 0.5428 0.8772 0.7695 0.6750 0.5921 0.5194 0.8621 0.7432 0.6407 0.5523 0.4761 0.8475 0.7182 0.6086 0.5158 0.4371 0.8333 0.6944 0.5787 0.4823 0.4019 6 7 8 9 10 0.7903 0.7599 0.7307 0.7026 0.6756 0.7462 0.7107 0.6768 0.6446 0.6139 0.7050 0.6651 0.6274 0.5919 0.5584 0.6663 0.6227 0.5820 0.5439 0.5083 0.6302 0.5835 0.5403 0.5002 0.4632 0.5963 0.5470 0.5019 0.4604 0.4224 0.5645 0.5132 0.4665 0.4241 0.3855 0.5346 0.4817 0.4339 0.3909 0.3522 0.5066 0.4523 0.4039 0.3606 0.3220 0.4803 0.4251 0.3762 0.3329 0.2946 0.4556 0.3996 0.3506 0.3075 0.2697 0.4104 0.3538 0.3050 0.2630 0.2267 0.3704 0.3139 0.2660 0.2255 0.1911 0.3349 0.2791 0.2326 0.1938 0.1615 11 12 13 14 15 0.6496 0.6246 0.6006 0.5775 0.5553 0.5847 0.5568 0.5303 0.5051 0.4810 0.5268 0.4970 0.4688 0.4423 0.4173 0.4751 0.4440 0.4150 0.3878 0.3624 0.4289 0.3971 0.3677 0.3405 0.3152 0.3875 0.3555 0.3262 0.2992 0.2745 0.3505 0.3186 0.2897 0.2633 0.2394 0.3173 0.2858 0.2575 0.2320 0.2090 0.2875 0.2567 0.2292 0.2046 0.1827 0.2607 0.2307 0.2042 0.1807 0.1599 0.2366 0.2076 0.1821 0.1597 0.1401 0.1954 0.1685 0.1452 0.1252 0.1079 0.1619 0.1372 0.1163 0.0985 0.0835 0.1346 0.1122 0.0935 0.0779 0.0649 16 17 18 19 20 0.5339 0.5134 0.4936 0.4746 0.4564 $1 (1 + i)" 0.4581 0.4363 0.4155 0.3957 0.3769 0.3936 0.3714 0.3503 0.3305 0.3118 0.3387 0.3166 0.2959 0.2765 0.2584 0.2919 0.2703 0.2502 0.2317 0.2145 0.2519 0.2311 0.2120 0.1945 0.1784 0.2176 0.1978 0.1799 0.1635 0.1486 0.1883 0.1696 0.1528 0.1377 0.1240 0.1631 0.1456 0.1300 0.1161 0.1037 0.1415 0.1252 0.1108 0.0981 0.0868 0.1229 0.1078 0.0946 0.0829 0.0728 0.0930 0.0802 0.0691 0.0596 0.0514 0.0708 0.0600 0.0508 0.0431 0.0365 0.0541 0.0451 0.0376 0.0313 0.0261 PV = APPENDIX 9.2 Present value of an annuity of $1 per period. 4% 11% 12% 13% 16% 18% Periods 1 2 3 4 5 0.9615 1.8861 2.7751 3.6299 4.4518 5% 0.9524 1.8594 2.7232 3.5460 4.3295 6% 0.9434 1.8334 2.6730 3.4651 4.2124 7% 8% 9% 10% 0.9346 0.9259 0.9174 0.9091 1.8080 1.7833 1.7591 1.7355 2.6243 2.5771 2.5313 2.4868 3.3872 3.3121 3.2397 3.1698 4.1002 3.9927 3.8897 3.7907 0.9009 1.7125 2.4437 3.1024 3.6959 0.8929 1.6901 2.4018 3.0373 3.6048 0.8850 1.6681 2.3612 2.9745 3.5172 14% 0.8772 1.6467 2.3216 2.9137 3.4331 0.8621 1.6052 2.2459 2.7982 3.2743 0.8475 1.5656 2.1743 2.6901 3.1272 20% 0.8333 1.5278 2.1065 2.5887 2.9906 6 7 8 9 10 5.2421 6.0021 6.7327 7.4353 8.1109 5.0757 5.7864 6.4632 7.1078 7.7217 4.9173 5.5824 6.2098 6.8017 7.3601 4.7665 4.6229 4.48594.3553 5.3893 5.2064 5.0330 4.8684 5.9713 5.7466 5.5348 5.3349 6.5152 6.2469 5.9952 5.7590 7.0236 6.7101 6.4177 6.1446 4.2305 4.7122 5.1461 5.5370 5.8892 4.1114 4.5638 4.9676 5.3282 5.6502 3.9975 4.4226 4.7988 5.1317 5.4262 3.8887 4.2883 4.6389 4.9464 5.2161 3.6847 4.0386 4.3436 4.6065 4.8332 3.4976 3.8115 4.0776 4.3030 4.4941 3.3255 3.6046 3.8372 4.0310 4.1925 11 12 13 14 15 8.7605 9.3851 9.9856 10.5631 11.1184 8.3064 8.8633 9.3936 9.8986 10.3797 7.8869 8.3838 8.8527 9.2950 9.7122 7.4987 7.9427 8.3577 8.7455 9.1079 7.1390 7.5361 7.9038 8.2442 8.5595 6.8052 6.4951 7.1607 6.8137 7.4869 7.1034 7.7862 7.3667 8.0607 7.6061 6.2065 6.4924 6.7499 6.9819 7.1909 5.9377 6.1944 6.4235 6.6282 6.8109 5.6869 5.9176 6.1218 6.3025 6.4624 5.4527 5.6603 5.8424 6.0021 6.1422 5.0286 5.1971 5.3423 5.4675 5.5755 4.6560 4.7932 4.9095 5.0081 5.0916 4.3271 4.4392 4.5327 4.6106 4.6755 16 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 17 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 18 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 19 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 20 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 1 $1 - (1 + i)" PVAL = 1 7.3792 7.5488 7.7016 7.8393 7.9633 6.9740 7.1196 7.2497 7.3658 7.4694 6.6039 6.7291 6.8399 6.9380 7.0248 6.2651 6.3729 6.4674 6.5504 6.6231 5.6685 5.7487 5.8178 5.8775 5.9288 5.1624 5.2223 5.2732 5.3162 5.3527 4.7296 4.7746 4.8122 4.8435 4.8696