Problem 13.52 Navak Foods manufactures and sells frozen dinners. The packaging machine was acquired 4 years ago for $492,000, and the machine can be used for another 5 years, with a residual value of $42,000. Recently, the machine has broken down quite frequently, which caused bottleneck in production and back orders for many retailers. Many retailers have filed several complaints about unreliable delivery. The annual production and cast information is as follows: Direct materials S121,000 Direct labour 268,000 Manufacturing Overhead* 209,000 Thirty percent of the manufacturing overhead is variable A salesperson heard about Novak's problem and approached Novak with a new packaging machine costing $636,000, which can last 6 years without any residual value at the end. The new machine will reduce direct materials and direct labour by 25%, and variable manufacturing overhead by 30%. In addition, Navak will be able to reduce the working capital by $20,000 when the new machine is in operation; however, at the end of the project, $20,000 of working capital will be required. If Novak replaces the old machine with the new machine, the old machine can be sold for $30,000. Novak's investment policies include a 5% of required rate of return and a 3 year payback period - Your answer is correct. What is the net present value for the new packaging machine? (Round entry to o decimal places, -.g. 5,275. Show a negative amount preceded by a minus signe.g. -5,000 or (5,000). Use Time Value of Money Table values to 4 decimals, e.g. 0.5823) Net Present Values -43190 LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is correct. What is the payback period? (Round answer to 2 decimal places, e.g. 1.25.) Payback period S.OS years LINK TO TEXT LINK TO TEXT LINK TO TEXT El Your answer is incorrect. Try again. What is accrual accounting rate or return? (Round answer to 2 decimal places, e.g. 1.25%.) Accrual Accounting Rate of Return 12.84 LINK TO TEXT LINK TO TEXT LINK TO TEXT Question Attempts: Unlimited