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he Sweetwater Candy Company would like to buy a new machine that would automatically dip chocolates. The dipping operat urrently is done largely by hand.
he Sweetwater Candy Company would like to buy a new machine that would automatically "dip" chocolates. The dipping operat urrently is done largely by hand. The machine the company is considering costs $240,000. The manufacturer estimates that the machine would be usable for five years but would require the replacement of several key parts at the end of the third year. These arts would cost $11,600, including installation. After five years, the machine could be sold for $5,000. The company estimates that the cost to operate the machine will be $9,600 per year. The present method of dipping chocolates osts $56,000 per year. In addition to reducing costs, the new machine will increase production by 3,000 boxes of chocolates pe ear. The company realizes a contribution margin of $1.80 per box. A 13% rate of return is required on all investments. lick here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. equired: . What are the annual net cash inflows that will be provided by the new dipping machine? Compute the new machine's net present value. Complete this question by entering your answers in the tabs below. Required 1Required 2 What are the annual net cash inflows that will be provided by the new dipping machine?.._._..........._._.......... Total annual net cash inflows Required 1 Required 2
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