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Eutura Vall Data Table EH Cost of the machine $120,000 Increased contribution margin $23,000 Life of the machine 9 years Required rate of return 12%
Eutura Vall Data Table EH Cost of the machine $120,000 Increased contribution margin $23,000 Life of the machine 9 years Required rate of return 12% Amazing estimates they will be able to produce more candy using the second machine and thus increase their annual contribution margin. They also estimate 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 year-end except for initial investment amounts. Print Done 0 E21-22 (similar to) Question Help Amazing Candy Company is considering purchasing a second chocolate dipping machine in order to expand their business. The information Amazing has accumulated regarding the new machine is: Click the icon to view the information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Calculate the following for the new machine: a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is Enter any number in the edit fields and then click Check Answer. 5 parts remaining Clear All Check Answer nts . Requirements 1. Calculate the following for the new machine: a. Net present value b. Payback period c. Discounted payback period d. Internal rate of return (using the interpolation method) e. Accrual accounting rate of return based on net initial investment (assume straight-line depreciation) 2. What other factors should Amazing Candy consider in deciding whether to purchase the new machine? Print Done
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