The sweetwater candy company would like to buy a new

Reference no: EM13574624

The Sweetwater Candy Company would like to buy a new machine that would automatically "dip" chocolates. The dipping operation is currently done largely by hand.The machine the company is considering costs $125,000. The manufacturer estimates that the machine would be usable for 10 years. After 10 years, the machine could be sold for $7,500.

The company estimates that the cost to operate the machine will be $7,000 per year.The present method of dipping chocolates costs $30,000 per year. In addition to reducing costs, the new machine will increase production by 6,000 boxes of chocolates per year. The company realizes a contribution margin of $1.50 per box. A 20% rate of return is required on all investments.

What are the annual net cash inflows that will be provided by the new dipping machine?
Compute the new machine's net present value

Reference no: EM13574624

Questions Cloud

Match the appropriate letter for the key term or concept to : match the appropriate letter for the key term or concept to each definition provided items 1-15. note that not all key

Determine the adjusted npv for each project using the : replacement decisions with unequal lives. consider two projects x and yprojectcostlifeannual after-tax cash

For the year ended june 30 2011 net income for silk : for the year ended june 30 2011 net income for silk corporation was 7400. depreciation expense was 2000. during the

Redd whyte and blu agreed to divide income and loss in the : redd whyte and blu agreed to divide income and loss in the proportion to their beginning capital balances. net income

The sweetwater candy company would like to buy a new : the sweetwater candy company would like to buy a new machine that would automatically dip chocolates. the dipping

Partner q is retiring from the qrs partnership the : partner q is retiring from the qrs partnership. the partnership profitloss ratio is 532. the partner capital balances

Determine who is best prepared to take responsibility for : determine who is best prepared to take responsibility for addressing climate change issues - individuals scientists

Wendells donut shoppe is investigating the purchase of a : wendells donut shoppe is investigating the purchase of a new 18600 donut-making machine. the new machine would permit

Calculate profitability and liquidity measures presented : calculate profitability and liquidity measures presented here are the comparative balance sheets of hames inc. at

User Account

All Pages