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machine costs $30,500. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.): Multiple Choice $2,050 $275 $5,450 $2,325

machine costs $30,500. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.): Multiple Choice $2,050 $275 $5,450 $2,325

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3,650 a year to operate, as opposed to the old machine, which costs $3,925 per year to operate. Also, because of increased capacity, an additional 20,500 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $7,500 and the new machine costs $30,500. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.): Multiple Choice $2,050 $275 $5,450 $2,325
Transcribed Image Text:Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3,650 a year to operate, as opposed to the old machine, which costs $3,925 per year to operate. Also, because of increased capacity, an additional 20,500 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $7,500 and the new machine costs $30,500. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.): Multiple Choice $2,050 $275 $5,450 $2,325
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