The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $60, 000. The annual cash flows have the following projections: 18 Cash Flow Year $23,000 1 ms 26,000 2 i229,000 15,000 A wot dass 4 uod2 oll 5 8,000 The Capital Budgeting Decision If the cost of capital is 13 percent, what is the net present value of selecting a. a new machine? What is the internal rate of return? b. Should the project be accepted? Why? C