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Calculate the new machine's Net present value assuming a 14% discount rate

Calculate the new machines internal rate of return

Calculate the new machine's payback period

1 received in n periods. Ayayai Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $100,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will need a $10,000 overhaul in four years. More important, it does not provide enough capacity to meet customer demand. The company currently produces and sells 12,000 frames per year, generating a total contribution margin of $97,500. Martson Molders currently sells a molding machine that will allow Ayayai Pix to increase production and sales to 15,150 frames per year. The machine, which has a ten-year life, sells for $121,000 and would cost $9,000 per year to operate. Ayayai Pix's current machine costs only $8,000 per year to operate. If Ayayai Pix purchases the new machine, the old machine could be sold at its book value of $5,000. The new machine is expected to have a salvage value of $18,500 at the end of its ten-year life. Ayayai Pix uses straight-line depreciation. Click here to view the factor table. 1 received in n periods. Ayayai Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $100,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will need a $10,000 overhaul in four years. More important, it does not provide enough capacity to meet customer demand. The company currently produces and sells 12,000 frames per year, generating a total contribution margin of $97,500. Martson Molders currently sells a molding machine that will allow Ayayai Pix to increase production and sales to 15,150 frames per year. The machine, which has a ten-year life, sells for $121,000 and would cost $9,000 per year to operate. Ayayai Pix's current machine costs only $8,000 per year to operate. If Ayayai Pix purchases the new machine, the old machine could be sold at its book value of $5,000. The new machine is expected to have a salvage value of $18,500 at the end of its ten-year life. Ayayai Pix uses straight-line depreciation. Click here to view the factor table

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