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PART 7 Capital Decision Making Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day He believes that a

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PART 7 Capital Decision Making Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day He believes that a cold soda machine would be appreciated by his workers and an appreciated worker is a good worker He has priced a machine at a national member only warehouse for $2.150. The machine should be usable for 5 years, after which it would be inefficient obsolete and would have to be disposed of at the dump. Big Al believes that 7 cans a day will be purchased. The plant is open five days a week, 50 weeks per year. A case of soda (24 cans) costs $6.48 and Big Al believes that a price of $ 70 per can would win him good will What is the estimated annual sales in cans of soda? (17.01 What is the contrbution margin per can of soda? (rounded to two places $# ) (17.02) How many cans of soda must be sold each year to breakeven? (Round up to zero places, cans) (1703) Annual incremental cash inflows from the soda machine? (rounded to two places. $ #) (17.04) What is the payback period in years? (rounded to two places, 8 years) (1705) if the time value of money is 12% per year what is the net present value? Use the tables on page 18 (17.06) What is the internal rate of return Pick the closest interest rate from the tables on page 18 (17.07)

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