The Sweetwater Candy Company would like to buy a new machine for $$160,000$ that automatically "dips" chocolates. The manufacturer estimates the machine would be usable for five years but would require replacement of several key parts costing $$10,800$ at the end of the third year. After five years, the machine could be sold for $$5,000.$

The company estimates the cost to operate the machine will be $$8,800$ per year. The present labor$-$intensive method of dipping chocolates costs $$48,000$ per year. In addition to reducing costs, the new machine will increase production by $4,000$ boxes of chocolates per year. The company realizes a contribution margin of $$1\mathrm{.}40$ per box. A $18\%$ rate of return is required on all investments.

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables

Required:

What are the annual net cash inflows provided by the new dipping machine?

Compute the new machine's net present value.

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