"Compute the internal rate of return for each investment. Use the above table of present value of an annuity of $1. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest percent."

Cousin's Salted Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $60,316.96 and could be used to deliver an additional 52,000 bags of pretzels per year. Each bag of pretzels can be sold for a contribution margin of $0.58. The delivery truck operating expenses, excluding depreciation, are $0.79 per mile for 18,000 miles per year. The bagging machine would replace an old bagging machine, and its net investment cost would be $32,662.50. The new machine would require three fewer hours of direct labor per day. Direct labor is $10 per hour. There are 250 operating days in the year. Both the truck and the bagging machine are estimated to have six-year lives. The minimum rate of return is 14%. However, Cousin's has funds to invest in only one of the projects. Present Value of an Annuity of $1 at Compound Interest 12% 10% 0.909 0. 1.736 2.4872.402 2.283 2.10 Year 15% 696 0.943 1.833 2.673 3.4 20% 893 0.870 0.833 1.528 1.690 1.626 65 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.352 2.991 4.917 4.355 4.111 3.784 3.326 5.582 4.868 4.5644.1 60 3.605 6.210 5.335 4.968 4.4873.837 5.328 5.650 6.802 5.759 4.772 4.031 10 7.360 6.145 5.019 4.192 a. Compute the internal rate of return for each investment. Use the above table of present value of a return to the nearest percent. your present value factor answers to three decimal places and internal rate of The sum of the present values of a series of equal cash flows to be received at fixed intervals Delivery Truck Bagging Machine Present value factor Internal rate of return b. The bagging machine rate of return was s le t than the minimum rate o return requirement of 14% while the delivery truck rate of return was Therefore the recommendation is to invest in the Select s lect than the minimum rate of return requirement of 14%