NEED PART 4 & 5 ANSWERED ONLY Boston Cola is considering the purchase of a special-purpose bottling machine for $35,000. It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates the following savings in cash operating costs: Boston Cola uses a required rate of return of 14% in its capital budgeting decisions. Ignore income taxes in your analysis. Assume all cash flows occur at year-end except for initial investment amounts. Data Table Year Amount Year 1 $15,000 Year 2 11,000 Year 3 10,000 Year 4 8,000 Total $44,000 (Use factor amounts rounded to three decimal places. Round your answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value.) Calculate the following for the special purpose bottling machine: 1. Net present value = -1900 2. Payback period = 2.90 3. Discounted payback period: Amount can not be determined 4. Internal rate of return (IRR) : (using the interpolation method) (Use a trial-and-error approach and straight-line interpolation as necessary. Round your answer to the nearest hundredth of a percent, X.XX%.) 5. Calculate the accrual accounting rate of return based on net initial investment: (Assume straight-line depreciation. Use the average annual savings in cash operating costs when computing the numerator of the accrual accounting rate of return. Accrual accounting rate of return based on net initial investment (Assume straight-line depreciation. Use the average annual savings in cash operating costs when computing the numerator of the accrual accounting rate of return.)
NEED PART 4 & 5 ANSWERED ONLY
Boston Cola is considering the purchase of a special-purpose bottling machine for $35,000.
It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates the following savings in cash operating costs:
Boston Cola uses a required
Data Table
Year |
Amount |
Year 1 |
$15,000 |
Year 2 |
11,000 |
Year 3 |
10,000 |
Year 4 |
8,000 |
Total |
$44,000 |
(Use factor amounts rounded to three decimal places. Round your answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value.)
Calculate the following for the special purpose bottling machine:
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