Data relating to Randall Ltd.s single product are as follows:

	Selling price	$5.47
	Direct materials	0.82
	Direct labour	0.81
	Overhead (60% fixed)	1.00
	Gross Profit	$2.84

The company currently produces 51937 units.

Randall Ltd. is considering purchasing a new machine that is expected to decrease variable costs by 17%. The expected useful life of the new machine is 10 years.

Assuming a weighted average cost of capital of 8%, what is the net present value of the increase in contribution margin relating to this investment?

Select one:

a. $8302

b. $120268

c. $196587

d. $96570

A company invests in a new project that has an initial outlay of $367512. The project will generate annual net cash flows of $137474 over a period of 7 years. The after-tax cost of capital is 12%.

What is the payback period (in years)?

Select one:

a. 1.67

b. 2.67

c. 3.56

d. 7.00