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US Cols is considering the purchase of a special-purpose botting machine for $35,000. It is expected to have a useful life of 4 years with
US Cols is considering the purchase of a special-purpose botting machine for $35,000. It is expected to have a useful life of 4 years with no terminal disposal value. The plant marager estimates the folosing savinge in ceah operating costs: (Click the icon to view the savings in cash operating costs.) US Cola uses a required rate of retum of 14% in its capital budgeting decisions. Ignore income taxes in your analysis assume al cash flows occur at year-end except for initial investment amounts (Click the icon to view the Future Value of $1 faclors.) Click the icon to view the Future Value of Annuily of $1 faclors.) Click the icon to view the Present Value of $1 factors. Click the icon to view the Present Value of Annuity of $1 factors. Read the requirements Data table Year 1. Nel present value. (Use faclor amounts rounded to three decimal places. Round your answers to the nearest whole dollar. Use a minus sign or parentheses for a negative nel present value.) The nel present value is $ 1900.000 2. Payback period. (Round your answer to two decimal places.) The payback period is 2.90 years 2 Amount $ 15,000 11,000 10.000 8,000 $ 40,000 3. Discounted payback period Total O A. 3.75 OB. 3.68 O c. 3.9 D. Amount can not be determined 4. Intemal rate of retum (using Interpolation method). (Use a trial-and-estor approach and straight-Ine Interpolation as necessary. Round your answer to the nearest hundredth of a percent, XXX The Internal rate of retum (IRR) IS Print Done 5. Accrual sccounting rate of retum based on ret initial investment Assume straight-ine depreciation. Use the average annual savings in cash operating costs when computing the numerator of the accrual accounting rate of return.(Round your final answer to the nearest hundredth of a percent X.XX%) The accrual accounting rate of ratum (AARR) IS
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