Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 150 baseballs per hour to sewing 270 per hour. The contribution margin per unit is $0.4 per baseball. Assume that any increased production of baseballs can be sold. The second machine is an automatic packing machine for the golf ball line. The packing machine will reduce packing labor cost. The labor cost saved is equivalent to $21 per hour. The sewing machine will cost $253,300, have an eight year life, and will operate for 1,400 hours per year. The packing machine will cost $92,700, have an eight-year life, and will operate for 1,200 hours per year. Diamond and Turf seeks a minimum rate of return of 15% on its investments Present Value of an Annuity of $1 at Compound Interest 12% 0.943 0.909 0.893 1.736 1.690 2090 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 Year 15% 0.870 1.626 2.673 2.487 2.402 2.283 3.465 3.170 3.037 2.855 3.353 3.785 4.160 5.335 4.968 4.487 5.328 4.772 5.019 696 10% 1.833 4 3.605 4.917 4.355 .111 5.582 4.868 4.564 4.2123.791 6.210 6.802 7.360 8 5.759 10 6.145 5.650