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Cost of the machine $ 9 0 , 0 0 0 Increased annual contribution margin $ 1 8 , 0 0 0 Life of the
Cost of the machine
$
Increased annual contribution margin
$
Life of the machine
years
Required rate of return
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 yearend except for initial investment amounts.
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