Don't$-$Cha$-$Wanna$-$a$-$Coffee, a large$-$scale coffee company that has a chain of $125$ retail coffee stores throughout New England,

was embroiled in an ethics scandal $3$ years ago. One of their employees overinflated the company earnings which caused the

value of the stock to plummet. Investors were not happy, so they pulled out a large majority of their investment and sales were hurt by the negative publicity.

To help recover from this catastrophe, the chief operating officer $($COO$)$ is considering making an investment to purchase a machine that speeds up the cooking time of their top secret donut.

The donuts produced from this machine allows the consumer $1$ granted wish. Sales are so widely popular that the current donut machine just cannot keep up with supplying enough $($production$)$

for the customers' demand. Dunkin, the COO, hopes that this new machine allows the donuts to be produced quicker than the stand$-$alone production machine.

This will allow for an increase to the volume of donuts produced within the same time frame that current production is running. Dunkin is a financially savy employee,

so he requires an evaluation of the effect this purchase will have to his compensation.

Dunkin receives a base salary plus $30\%$ bonus of his salary if he meets certain benchmarks.

Below is the information he has given you for his required analysis. He wants it on his desk by the end$-$of$-$semester!

$1$a$.$ Calculate the sales margin without the new machine. Financial Data for consideration:

$1$b$.$ Calculate the sales margin with the new machine. Machine cost $2,800,000$$

$2$a$.$ Calculate the asset turnover without the new machine. Projected generated income by new machine $800,000$$

$2$b$.$ Calculate the asset turnover with the new machine. Income generated without new machine $6,800,000$$

$3$a$.$ Calculate the Return On Investment without the new machine. Beginning year capital assets $($w$/$out machine$)7,800,000$$

$3$b$.$ Calculate the Return On Investment with the new machine. End of year captial assets $($w$/$out machine$)8,200,000$$

$4$a$.$ Calculate the Residual Income without the new machine. Tax rate $21\%$

$4$b$.$ Calculate the Residual Income with the new machine. Minimum rate of return $12\%$

$5$a$.$ Calculate the Economic Value Added without the new machine. Weighted average cost of capital $7\%$

$5$b$.$ Calculate the Economic Value Added with the new machine. Sales without machine $17,800,000$$

$6$a$.$ Calculate the sales margin with the new machine. Sales with machine $19,200,000$$

$6.$ Calculate the sales margin with the new machine.

$7.$ Should COO Dunk purchase the machine? Justify your answer with facts.