Wendell's Donut Shoppe is investigating the purchase of a new $40,000 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,200 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,000 dozen more donuts each year. The company realizes a contribution margin of $2.40 per dozen donuts sold. The new machine would have a six-year useful life. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? Annual savings in part-time help Added contribution margin from expanded sales Annual cash inflows 2. Find the internal rate of return promised by the new machine to the nearest whole percent. Internal Rate of Return Factor Choose Denominator: Choose Numerator: Number of years Internal rate of return Factor % Information on four investment proposals is given below: Investment Proposal B Investment required $ (390,000) $ (30,000) $ (40,000) $ (600,000) Present value of cash inflows 551,000 41,000 64,100 800,000 Net present value $ 161,000 $ 11,000 $ 24,100 $ 200,000 Life of the project 5 years 7 years 6 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) Project Profitability Index Investment Proposal B D 2. Rank the proposals in terms of preference. ABCD DCBA BCAD CABD