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Wendell's Donut Shoppe is investigating the purchase of a new $33,000 donut-making machine. The new machine would permit the company to reduce the amount ofpart-time
Wendell's Donut Shoppe is investigating the purchase of a new $33,000 donut-making machine. The new machine would permit the company to reduce the amount ofpart-time help needed, at a cost savings of $5,700 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,100 dozen more donuts each year. The company realizes a ear useful life. Click here to view Exhibit 13B-1 and Exhibit 13B.2 to determine the appropriate discount factoris) using tables ired 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 gin from exp anded 2. Find the internal rate of return promised by the new machine to the nearest whole percent e Denominator: Internal rate of r actor Factor Number of y
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