Cost of the machine $100,000 Increased annual contribution margin $20,000 Life of the machine 10 years Required rate of return 6% estimates it will be able to produce more candy using the second machine and thus increase its annual contribution margin. It also estimates there will be a small disposal value of the machine but the cost of removal will offset that value. Ignore income tax issues in your answers. Assume all cash flows occur at year-end

Calculate the following for the new machine:

a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.)

The net present value is

.

Part 2

b. Payback period (Round your answer to two decimal places.)

The payback period in years is

.

Part 3

c. Discounted payback period (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX.)

The discounted payback period in years is

.

Part 4

d. Internal rate of return (Round the rate to two decimal places, X.XX%.)

The internal rate of return (IRR) is

%.

Part 5

e. Accrual accounting rate of return based on the net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.)

Based on the net initial investment, the accrual accounting rate of return (AARR) is

%.