Requirement $1.$ What is the expected net cash inflow per year from purchasing a second shrinkwrap machine $($i$.$e$.,$

how much cost could be saved each year by eliminating the wait time$)?$

The expected net cash inflow $($cost savings$)$ per year of eliminating employee wait time is

Requirements

What is the expected net cash inflow per year from purchasing a second

shrinkwrap machine $($i$.$e$.,$ how much cost could be saved each year by

eliminating the wait time$)?$

What is the payback period of the second shrinkwrap machine? Round your

answer to the nearest two decimal places.

What would the expected net cash inflow per year be if the hourly wage rate

used for this analysis was increased by $25\%$ to reflect the cost of

employee benefits?

What is the payback period of the second shrinkwrap machine when the

increased wage rate is used to calculate the expected net cash inflow

per year? Round your answer to the nearest two decimal places.

Did the payback period using the increased hourly wage rate increase or

decrease as compared to the original payback period using the hourly rate

without any benefits included? Explain.

Assumptions

Cost of new shrinkwrap machine plus installation $=$$$26,000$

Average wait time per warehouse picker per day $=60$ minutes

Number of warehouse pickers $=15$

Hourly wage of warehouse personnel $=$$$12\mathrm{.}00$

Foodbank is open $5$ days a week, $52$ weeks a year, except for $10$ holidays

Expected useful life of machine $=20$ years

Expected salvage value $=$$$1,500$

More info

Many times, large quantities of food need to be shrinkwrapped to secure the items

for shipping to the charitable organizations. The VP of Operations at the Chicago

Foodbank recently performed a time study of the time that its warehouse personnel

spend waiting for the shrinkwrap machine to become available.