Sunland Inc. wants to purchase a new machine for $31,310, excluding $1,500 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,300, and Sunland Inc. expects to sell it for that amount. The new machine will decrease operating costs by $7,000 each year of its economic life. The straight-line depreciation method will be used for the new machine for a 6-year period with no salvage value. Click here to view the factor table. (a) Determine the cash payback period. (Round cash payback period to 2 decimal places, e.g. 10.53.)

(b) Determine the approximate internal rate of return. (Round answer to 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

c) Assuming the company has a required rate of return of 9%, determine whether the new machine should be purchased.

Sunland Inc. wants to purchase a new machine for $31,310, excluding $1,500 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,300, and Sunland Inc. expects to sell it for that amount. The new machine will decrease operating costs by $7,000 each year of its economic life. The straight-line depreciation method will be used for the new machine for a 6-year period with no salvage value. Click here to view the factor table. (a) Determine the cash payback period. (Round cash payback period to 2 decimal places, e.g. 10.53.) Cash payback period 3.64 years (b) Determine the approximate internal rate of return. (Round answer to decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return 32 % Your answer is incorrect. Sandhill Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $151,170 and have an estimated useful life of 5 years. It can be sold for $62,300 at the end of that time. (Amusement parks need to rotate exhibits to keep people interested. It is expected to increase net annual cash flows by $28,600. The company's borrowing rate is 8%. Its cost of capital is 10%. Click here to view the factor table. Calculate the net present value of this project to the company and determine whether the project is acceptable. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to 0 decimal places, eg. 125.) Net present value $ The project is unacceptable