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Koka and cookies Inc. is planning to add a new product to its line to manufacture this product. The company will need to purchase a
Koka and cookies Inc. is planning to add a new product to its line to manufacture this product. The company will need to purchase a new machine costing $ with an expected year useful life and a $ salvage value for this company all sales are for cash and all costs are out of pocket except for depreciation on the new machine sells cost, Im sorry sells and cost information follows expected annual cells of new product is expected annual cost of new product are direct materials direct labor overhead which does not include depreciation is and selling general expenses and administrative expenses are income tax rate is Percent compute annual straight line depreciation for the new machine determine net income for each year. Determine net cash flow for each year compute the machines payback period. Assume cash flows occur evenly, compute the accounting rate of return, compute net present value assuming a discount rate.
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