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CKEILIDe 14-3 (MIYU) Mitiman Nate OI Netu11 [Li4-S) Wendel's Donut Shoppe is investigating the purchase of a new $33,700 donut-making machine. The new machine would

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CKEILIDe 14-3 (MIYU) Mitiman Nate OI Netu11 [Li4-S) Wendel's Donut Shoppe is investigating the purchase of a new $33,700 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,500 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,200 dozen more donuts each year. The compary realizes a contribution margin of $2.00 per dozen donuts sold. The new machine would have a six-year useful life. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factoris) using tables. Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. What discount factor should be used to compute the new machine's internal rate of return? (Round your answer shat is me. places.) 5. What is the new machine's intemal rate of teturn? (Round your final answer to the nearest whole percentage.) 4. In addition to the data given previously, assume that the machine wil have a $13.860 salvage value at the end of six years. Under these conditions, what is the internal rate of return? (Hint: You may find it helptul to Use the net present value approach; find the discount rate that will cause the net present value to be closest to zero.) (Round your final answer to the nearest whole percentage.)

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