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Unformatted text preview: 8 6,000 0.305 Net present value $12,516 Correct! 14,000 3,000 1,830 DOUGHBOY BAKERY New machine cost $90,000 Life expectancy in years 8 Overhaul costs in 5th year $7,500 Selling price after 8 years $6,000 Annual operating costs of machine $14,000 Annual operating costs of manual icing $35,000 Increased package production from machine per year 5,000 Contribution margin per package $0.60 Required return on investment 16% Check figure: (2) Net present value $12,516 Given Data P14-25:...
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- Winter '09