Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Swifty Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine

image text in transcribed

Swifty Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make the corn dogs. Austin has shopped for machines and found that the machine he wants will cost $339,600. In addition, Austin estimates that the new machine will increase the company's annual net cash flows by $52,300. The machine will have a 12-year useful life and no salvage value. Click here to view PV tables. Calculate the cash payback period. (Round answer to 2 decimal places, e.g. 15.21.) Cash payback period years Calculate the machine's internal rate of return. Internal rate of return % Calculate the machine's net present value using a discount rate of 10%. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) Net present value $ Assuming Swifty Doggy, Inc.'s cost of capital is 10%, is the investment acceptable?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Accounting

Authors: Carl warren, James Reeve, Jonathen Duchac, Sheila Elworthy,

Volume 1, 2nd canadian Edition

176509739, 978-0176509736, 978-0176509743

More Books

Students also viewed these Accounting questions

Question

1 What other kinds of team from the list have you experienced?

Answered: 1 week ago

Question

What problems do operational data pose for BI systems? LO.1

Answered: 1 week ago