The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: 10 points Investment $15,000 $ 8,000 eBook Year 1 2 3 4 5 6 7 8 9 10 Cash Inflow $1,000 $2,000 $2,500 $ 4,000 $5,000 $6,000 $5,000 $4,000 $3,000 $2,000 Hint Print References Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? 2 Wendell's Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $3,800 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,000 dozen more donuts each year. The company realizes contribution margin of $1.20 per dozen donuts sold. The new machine would have a six-year useful life. 10 points Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. eBook Hint Print References Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? (Round your final answer to the nearest whole dollar amount.) 2. What discount factor should be used to compute the new machine's internal rate of return? (Round your answers to 3 decimal places.) 3. What is the new machine's internal rate of return? (Round your answer to whole decimal place i.e. 0.123 should be considered as 12%.) 4. In addition to the data given previously, assume that the machine will have a $9,125 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 answer to whole decimal place i.e. 0.123 should be considered as 12%.) 1. Annual cash inflows 2. Discount factor 3. Internal rate of return 4 Internal rate of return % %