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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 $3,900 in after-tax savings each year during its life (including the depreciation tax shield). 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 (a)4 percent, (b) 6 percent, and (c)8 percent. (Round your final answers to 2 decimal places.) 2. Compute the net present value of the proposed investment assuming an after-tax hurdle rate of (a)10 percent, (b) 12 percent, and (c)14 percent. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) Fithur Walite of \&1 n+in Table II Future Value of a Series of $1.00 Cash Flows (Ordinary Annuity) r(1+r)n1 Table III Present Value of $1.00(1+)n1 Table IV Present Value of Series of $1.00 Cash Flows r1(1(1+r)1)

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