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Business, 18.12.2019 03:31 familygrahambusiness

Wendell’s donut shoppe is investigating the purchase of a new $52,000 donut-making machine. the new machine would permit the company to reduce the amount of part-time needed, at a cost savings of $6,900 per year. in addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,800 dozen more donuts each year. the company realizes a contribution margin of $2.50 per dozen donuts sold. the new machine would have a six-year useful life. required: 1. what would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. what discount factor should be used to compute the new machine’s internal rate of return? (round your answers to 3 decimal places.)3. what is the new machine’s internal rate of return? (round your final answer to nearest whole percentage.)4. in addition to the data given previously, assume that the machine will have a $16,835 salvage value at the end of six years. under these conditions, what is the internal rate of return? (round your final answer to nearest whole percentage.)

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Wendell’s donut shoppe is investigating the purchase of a new $52,000 donut-making machine. the new...
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