Corn Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make he corn dogs. Austin has shopped for machines and found that the machine he wants will cost $160,000. In addition, Austin estimates that the new machine will increase the company's annual net cash inflows by $53,000. The machine will have a 16-year useful ife and no salvage value. Instructions A. Identify the following amounts: 1. Initial Cash Outlay 2. 3. Differential Annual Operating Cash Flow Differential Annual Net Income 3. Compute the following: 1. Cash Payback Period 2. 3. 4. Return on Investment (ROI) Net Present Value, assuming the cost of capital is 10% Internal Rate of Return Ad ye: % %
Corn Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make he corn dogs. Austin has shopped for machines and found that the machine he wants will cost $160,000. In addition, Austin estimates that the new machine will increase the company's annual net cash inflows by $53,000. The machine will have a 16-year useful ife and no salvage value. Instructions A. Identify the following amounts: 1. Initial Cash Outlay 2. 3. Differential Annual Operating Cash Flow Differential Annual Net Income 3. Compute the following: 1. Cash Payback Period 2. 3. 4. Return on Investment (ROI) Net Present Value, assuming the cost of capital is 10% Internal Rate of Return Ad ye: % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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