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Old MathJax webview q15 The Sweetwater Candy Company would like to buy a new machine that would automatically di currently done largely by hand. The

Old MathJax webview

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q15

The Sweetwater Candy Company would like to buy a new machine that would automatically di currently done largely by hand. The machine the company is considering costs $100,000. The machine would be usable for 12 years, but would require the replacement of several key parts would cost $6,200, including installation. After 12 years, the machine could be sold for about $ The company estimates that the cost to operate the machine will be only $7,000 per year. The costs $30,000 per year. In addition to reducing costs, the new machine will increase productio year. The company realizes a contribution margin of $200 per box. A 20% rate of return is req Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) Required: 1. What are the net annual cash inflows that will be provided by the new dipping machine? Net annual cash inflow 2. Compute the new machine's net present value using the incremental cost approach. (Roun places.) Net present value The Sweetwater Candy Company would like to buy a new machine that would automatically di currently done largely by hand. The machine the company is considering costs $100,000. The machine would be usable for 12 years, but would require the replacement of several key parts would cost $6,200, including installation. After 12 years, the machine could be sold for about $ The company estimates that the cost to operate the machine will be only $7,000 per year. The costs $30,000 per year. In addition to reducing costs, the new machine will increase productio year. The company realizes a contribution margin of $200 per box. A 20% rate of return is req Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) Required: 1. What are the net annual cash inflows that will be provided by the new dipping machine? Net annual cash inflow 2. Compute the new machine's net present value using the incremental cost approach. (Roun places.) Net present value

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