X Company is considering the purchase of a new machine. The machine would reduce the amount of part-time labor, at a cost savings of $16,900 per year. In addition, the machine would enable the company to increase production and sales of one of its products by 2,300 units; contribution margin of this product is $5.50 per unit. The machine would cost $150,000, last for four years, and have zero salvage value at the end of its life. 8. Assuming a discount rate of 7%, what is the net present value of buying the new machine? Submit Answer Tries 0/4 9. If the new machine will last for six years instead of four, what is the approximate internal rate of return of buying it? [enter your answer as .XX, so 1% would be .01]

X Company is considering the purchase of a new machine. The machine would reduce the amount of part-time labor, at a cost savings of $16,900 per year. In addition, the machine would enable the company to increase production and sales of one of its products by 2,300 units; contribution margin of this product is $5.50 per unit. The machine would cost $150,000, last for four years, and have zero salvage value at the end of its life. 8. Assuming a discount rate of 7%, what is the net present value of buying the new machine? Submit Answer Tries 0/4 9. If the new machine will last for six years instead of four, what is the approximate internal rate of return of buying it? [enter your answer as .XX, so 1% would be .01]

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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