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Can someone help me with this please and thank you!!! Burger Botanicals produces a wide range of herbal supplements sold nationwide through independent distributors. In
Can someone help me with this please and thank you!!!
Burger Botanicals produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing demand for its products, the company is considering the purchase of a new packaging machine to replace the seven-year-old machine currently in use. The new machine will cost $170,050, and installation will require an additional $3,150. The machine has a useful life of 10 years and is expected to have a salvage value of $3,905 at that time. The variable cost to operate the new machine is $11.05 per carton compared to the current machine's variable cost of $11.15 per carton, and Burger expects to pack 253,000 cartons each year. If the new machine is purchased, Burger will avoid a required $10,925 overhaul of the current machine in three years. The current machine has a market value of $12,775 Click here to view the factor table (a) Calculate the net present value of the new packaging machine. Assume that Burger Botanicals uses a 8% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971. Enter negative amount using a negative sign preceding the number for e.g. -59,991 or parentheses e.g. (59,991).) Net present value (b) Do you recommend that Burger Botanicals purchase the new machine? (c) Assume that Burger has adopted a new 13% discount rate. Calculate the net present value of the new packaging machine. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 2 decimal place, e.g. 58,971.75. Enter negative amount using a negative sign preceding the number for e.g. -59,991 or parentheses e.g. (59,991).) Net present value Do you recommend that Burger Botanicals purchase the new machineStep by Step Solution
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