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The owner of Atlantic City Confectionary is considering the purchase of a new semiautomatic candy...

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Accounting

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The owner of Atlantic City Confectionary is considering the purchase of a new semiautomatic candy machine. The machine will cost $29,000 and last 9 years. The machine is expected to have no salvage value at the end of its useful life. The owner projects that the new candy machine will generate $3,000 in after-tax savings each year during its life (including the depreciation tax shleld). Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Compute the profitability index on the proposed candy machine, assuming an after-tax hurdle rate of ()6 percent, (b)8 percent, and (c) 10 percent. (Round your final answers to 2 decimal places.)

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