Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

please help! the first 2 answers are correct. The last 2 is where I am struggling. Exercise 12-3 Internal Rate of Return (L012-3) Wendell's Donut

please help! the first 2 answers are correct. The last 2 is where I am struggling. image text in transcribed
image text in transcribed
image text in transcribed
Exercise 12-3 Internal Rate of Return (L012-3) Wendell's Donut Shoppe is investigating the purchase of a new $37700 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $6,600 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,500 dozen more donuts each year. The company realizes a contribution margin of $2.00 per dozen donuts sold. The new machine would have a six-year useful life. Click here to view Exhibit 128-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using tables. Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. What discount factor should be used to compute the new machine's internal rate of return? (Round your answer to 3 decimal places.) 3. What is the new machine's internal rate of return? (Round your final answer to the nearest whole percentage.) 4. In addition to the data given previously, assume that the machine will have a $14,130 salvage value at the end of six years. Under these conditions, what is the internal rate of return? (Hint: You may find it helpful to use the net present value approach; find the discount rate that will cause the net present value to be closest to zero.) (Round your final answer to the nearest whole percentage.) ances $ 1. Annual cash inflows 2 Discount factor 3. Internal rate of return 4 intamalla of retum 9,600 3.927 % % EXHIBIT 120-1 Present Value of stato 13% 2 3 Periods 4% 9% 5% 6 10% 17% 12% 10% 15% 165 17 18% 193 20% 21% 25 22% 23% 245 1 09620952 0943 0935 0926 0917 0909 0901 0893 0885 08770870 0862 0855 08470840 0833 0826 0820 0.813 0806 0800 0925 0907 0890 0873 0857 0342 0826 0812 0797 0783 0769 0756 0743 0731 0718 0706 069 0683 0672 0661 0650 0640 0889 0864 0840 084 0.794 om 0751 0731 07120693 0675 0658 0.64 0624 06090593 0579 0564 0551 0.537 0524 0512 4 0855 0823 07920763 0735 0708 0683 0659 0636 06130592 0572 0552 0534 05160499 0482 04670451 0.437 0423 0410 5 0322 0784 0347 0713 0681 0650 0621 0593 0567 0543 0519 0497 0.476 0456 0437 04190402 0386 0370 0355 0.341 0328 6 0790 0746 0705 0666 0630 0596 0564 053 0507 0480 0456 0432 04100390 0.370 0352 0.335 0319 0303 0289 0275 0.262 7 0760 0711 0665 0623 0583 0547 050 0482 0.452 0425 0400 0376 0354 0333 034 0296 0279 0.263 0249 0235 0m 0.210 8 0731 06770627 0582 0540 0502 0467 04340404 0376 0351 0327 0305 0285 0266 0249 0233 0278 0204 0191 01790168 9 0703 0545 0592 0544 05000460 04240391 0361 033 0308 0284 0263 0243 0225 0.209 0194 01800167 0155 014 0134 10 0676 0614 0558 0508 0463 0422 0386 0352 0322 0295 0270 0247 0221 0208 0191 0176 01620149 0137 0126 0115 0907 11 0650 0585 0527 0475 0429 0388 03500317 0287 0 261 0237 02150195 0178 0162 0948 0135 01230120103 0094 0086 12 0625 0557 0497 04 0397 0356 0319 0286 0257 0231 0208 0187 0368 0152 0137 0124 0108020092 0083 0076 0069 0 601 0530 0469 04150368 0326 0290 0258 0229 0204 0182 013 0145 01300116 0104 0093 0084 0075 00680061 0055 14 0572 050 04420388 0340 0299 0263 0.232 02050181 036003410125 OM 0099 OOR8 0078 0069 0062 0055 0049 0044 15 OSSS 041 041 0362 0.315 0275 0239 0209 0183 0160 0100123 008 0095 0084 0074 0065 0057 0051 004 0000 0035 16 0534 0458 0394 0339 0292 0252 02180188 01630141 012301070093 0.081 007 0062 0054 0047 0012 0035 0032 0028 050 006 0371 0317 0270 0210198 01700M6 0125 OOR 0093 000 006900600052 00450039 0034 0030 0026 0023 0 494 04460150 0296 0250 0212 01800153 000 om 009 0081 000 0099 0051 004 003 002 0028 0024 0021 005 19 045 0.396 031 021 0232 0194 0164 0138 0146 0.0980083 007000600051 0043 0037 0001 0027 0023 0020 001001 20 0456 037 032 0258 02150178 0149 0124 0904 007 0073 0001 0.0510043 00370031 0026 0022 0019 00 00 002 21 0.45 0.359 0294 0242 0199 0164 015 0112 0090 0077 0064 005 004 0037 003 0026 00220018 0015 000 000 000 22 0.422 0342 0278 0226 00150 02 01 OORT.0067 0056 0046 003 09 0026 0022 008 0095 000 0011 0009 0007 23 0005 0.120020202110170 U 0112 009 004 0000 0049 0040 001100210022 003 001 000 000 000 000 000 0 3900100247 0157 0950126 0102 0012 0006 005 004 0035 0028 002) 0019 005 000 000 000 000 0005 0005 0375 0295 02 014 014601160092 007 005100470038 00300024 0090 001 000 000 0009 0007 0006 2005 2004 260361 002200172 013501050084 0066 005) 0002 003 00250021 0002 0014 001 0002 0007 000 000 000 000 O 026 0207 0961 0125 000 0076 000 004 003 0079 002 00 00 con 20 030255 016 010 010090 01690054 0042 003 00200020000-0012 000 000 00060005 0000 0000 000 000 0009 0007 0005 0005 0004 000 0002 O 020 015 om 0907 000 000 00320015002200 00 0011 000 000 0005 0000 0000 000 0002 000) 03 02 0114 om 009 005 0057 004 0033 0026 00200015 000 000 000 0005 0004 000 0000 000 0002 0001 100208 0102 0011 006 00450012002200001 DOOK 0005 000 000 000 000 000 000 0000 0000 0000 0000 0000 10-cf-media.meducation.com XHIBIT 129-2 Present Value of an Annuity of $1 in Arrears: 145 6 95 10% 12 15% 16% 173 18 Periods 45 20% 213 22% 23% 24% 25% 1 0962 0952 0943 0935 0926 0917 0909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0847 0.840 0.833 0826 0820 083 0806 0.800 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 167 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 3 2775 2.723 2573 2624 2.571 2531 2487 2444 2402 2361 2322 2283 2246 2.210 2114 210 2106 2074 2042 2011 1981 1952 4 3630354634653387 3312324031703102 3037 2974 2914 2855 2798 2743 2690 2639 2589 2540 2494 2448 2404 2362 5 4452 4329 420 4100 393 390 391 3696 3.605 3517 3433 3352 3 274 3199 3127 305R 2991 2926 2864 2803 2745 2689 6 5242 5076 49174767 4623 4486 4355 4231 411 3.9983889 3784 3685 3589 3498 3410 3.325 3245 33673092 3020 2951 2 60025786 5582 S385 5205 5033 4868 4712 4564 4423 428 41604039 3922 3812 370636053508 3.4151327 32423161 67335463 621059715775535 5335 5146 4968 4799 4639 4487 4344 4207 4078 3954 3832 3726 3619 3518 36213329 9 74357108 6802 65552025995 5759 5537 5328 5132 4946. 472 4607 4451 4303 4163 4031 3905 3786 3673 3566 3463 10 7722 7360 70247 648 615 5889 5650 5 426 5 216 5019 413 4659 4494 4339 452 4054 323 3799 3682 3571 11 8760 306787 7499 709 5805 6.495 6 207 5938 5687 5453 5234 5029 48364656 4.486 4327-4177 40353902 3776 3656 9385853 B354793 7536 7161 681 6492 5194 5918 5660 5.421 5197 4988 479346114439 4278 4127 3.985 3.851 3725 3 99869.394885383587904 748779036750 6424 6122 5842 5583 5342 518 4910 4715533 4352 4203 4053 39123780 14 105629899 9295 87458244 2786 7367 6982 6 628 6302 6002 5724 5468 5229 5008 4802 4611 422 4265 4108 962 3824 15 90 3809712 9 8559 8061 7606 7191 6811 6.462 6142 5847 5575 5324 5.092 4876 46754489 43154153 4001 3859 16 11652 1038 30306 9447583017824 7379 6974 6604 6 265 5954 5668 5405 51624938 4730536 4357 41894033 3.887 0 22.166 1127447797539122 8544 8022 7549 7120 67296.373 6047 5749 5475 5222 4990 4775 576 4391 42194059 3910 18 126591269010878 1005993728756 8201 7702 7250 6840 6 457 61285818 5 534 5273 5033 48124608 419 420 40803928 19 131342085111580336 95048950 165 789 7366 6938 65506198 5877 5584 536 5070 4834635 4442 4263 4097 3.942 20 3.590 12.462 1470 10594 98 9929 854 1963 749 70756623 6259 5929 5628 5753 5301 4870 4657 4.450 410 21 14023 1282111764 106 0092822 8649 8075 75627102 6687 6312 5973 5665 5384 512794575 476 4 292 4121 3963 22 1451 116301211061201 9442812817976457170 570 5359 50115696 5410 51494909 4690 44884302 403.970 57 348 27012723 950 83 826677187230 67926399604 5723 542 5157 925 4707 499 47114373976 15 247 1798 550 579 5707985 34 7784 7283 6835 644 60735745 5451 512 937 4507 438 43981 25 5622 MM 783 1654 4559390778422784370 68736064 0975766 5467 5.19502451 27 1553 35 100 1129929 9161848 796 7372 6300 6.491 611 573 5.40 520644520 28 415130 105 10022 92377374096935 654 165798 555 254 2524 4154990 to 0100110 ROZ7884144160M 65250550522390 4745241573992 111211180650 022 7470 1 6366 S 8205505229 225 992 72 NOW 74070015061523 5252525145 4541415 150 1075 105 824 704 75250 52544419 EOR - DA

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Algebra Graphs and Models

Authors: Marvin L. Bittinger, Judith A. Beecher, David J. Ellenbogen, Judith A. Penna

5th edition

978-0321845405

Students also viewed these Accounting questions

Question

CL I P COL Astro- L(1-cas0) Lsing *A=2 L sin(0/2)

Answered: 1 week ago