Corn Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make the corn dogs. Austin has shopped for machines and found that the machine he wants will cost $160,000. In addition, Austin estimates that the new machine will increase the company's annual net cash inflows by $53,000. The machine will have a 16-year useful life and no salvage value.

Instructions:

A.

Identify the following amounts:
Initial Cash Outlay
Differential Annual Operating Cash Flow
Differential Annual Net Income

B.

Compute the following:
Cash Payback Period
Return on Investment (ROI)
Net Present Value, assuming the cost of capital is 10%
Internal Rate of Return