Business, 10.05.2021 18:20 josephbig9

Bugle's Bagel Bakery is investigating the purchase of a new bagel making machine. This machine would provide an annual operating cost savings of $3,650 for each of the next 4 years. In addition, this new machine would allow the production of one new type of bagel which would result in selling 1,500 dozen more bagels each year. The company earns a contribution margin of $0.90 on each dozen bagels sold. The purchase price of this machine is $13,450 and it will have a 4 year useful life. Bugle's discount rate is 14%. (Ignore income taxes.) The total annual cash inflow from this machine for capital budgeting purposes is:
a. $4,750
b. $5,150
c. $5,000
d. $3,650

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Bugle's Bagel Bakery is investigating the purchase of a new bagel making machine. This machine would...

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