Doughboy Bakery would like to buy a new machine for putting icing and other toppings on pastries. These are now put on by hand. The machine that the bakery is considering costs $91,000 new. It would last the bakery for eight years but would require a $7,500 overhaul at the end of the third year. After eight years, the machine could be sold for $6,000.

The bakery estimates that it will cost $10,500 per year to operate the new machine. The present manual method of putting toppings on the pastries costs $30,000 per year. In addition to reducing operating costs, the new machine will allow the bakery to increase its production of pastries by 5,000 packages per year. The bakery realizes a contribution margin of $0.60 per package. The bakery requires a 6% return on all investments in equipment. (Ignore income taxes.)

Click here to viewExhibit 11B-1andExhibit 11B-2, to determine the appropriate discount factor(s) using tables.

Required:1.What are the annual net cash inflows that will be provided by the new machine?

1.Annual net cash inflows$22,500

2..Compute the new machine's net present value. Use the incremental cost approach.(Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar.)

Need help with net present value

Net present value$?