Divine Candy Company is considering purchasing a second chocolate dipping machine in order to expand...
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Divine Candy Company is considering purchasing a second chocolate dipping machine in order to expand its business. The information Divine has accumulated regarding the new machine is: (Click the icon to view the information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements. Requirement 1. Calculate the following for the new machine: a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is b. Payback period (Round your answer to two decimal places.) The payback period in years is c. Discounted payback period (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX.) The discounted payback period in years is d. Internal rate of return (Round the rate to two decimal places, X.XX%.) The internal rate of return (IRR) is %. e. Accrual accounting rate of return based on the net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.) Based on the net initial investment, the accrual accounting rate of return (AARR) is %. Requirement 2. What other factors should Divine consider in deciding whether to purchase the new machine? (Select all that apply.) A. The costs of training and other "hidden" start-up costs are included in the estimated $120,000 cost of the new machine. B. Issues related to the financing of the project, and the availability of capital to pay for the machine. C. The upheaval of installing a new computer system. Its useful life is estimated to be 8 years. This means that Divine could face this upheaval again in 8 years. D. The effect of the system on employee morale. E. The benefits of the new machine for customers. Divine Candy Company is considering purchasing a second chocolate dipping machine in order to expand its business. The information Divine has accumulated regarding the new machine is: (Click the icon to view the information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements. Requirement 1. Calculate the following for the new machine: a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is b. Payback period (Round your answer to two decimal places.) The payback period in years is c. Discounted payback period (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX.) The discounted payback period in years is d. Internal rate of return (Round the rate to two decimal places, X.XX%.) The internal rate of return (IRR) is %. e. Accrual accounting rate of return based on the net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.) Based on the net initial investment, the accrual accounting rate of return (AARR) is %. Requirement 2. What other factors should Divine consider in deciding whether to purchase the new machine? (Select all that apply.) A. The costs of training and other "hidden" start-up costs are included in the estimated $120,000 cost of the new machine. B. Issues related to the financing of the project, and the availability of capital to pay for the machine. C. The upheaval of installing a new computer system. Its useful life is estimated to be 8 years. This means that Divine could face this upheaval again in 8 years. D. The effect of the system on employee morale. E. The benefits of the new machine for customers
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