Chapter13Solution - Excel Templates Chapter 13 Student...

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Unformatted text preview: Excel Templates Chapter 13 Student Name: <Type your name here> Class: <Type your class here> Problem 13-25 Given Data: DOUGHBOY BAKERY New machine cost $90,000 Life expectancy in years 8 Future overhaul costs $7,500 Year overhaul would occur 5 Future selling price $6,000 Year sale would occur $8 Annual operating costs of machine $14,000 Annual operating costs of present method $35,000 Increased production from machine per year 5,000 Contribution margin per package $0.60 Required return on investment 16% <Type your name here> <Type your class here> Excel Templates Chapter 13 Problem 13-25 Part 1 Net Annual Cash Inflows Operating costs, present method $35,000 Operating costs, new machine 14,000 Annual savings in operating costs 21,000 + Increased annual contribution margin 3,000 Total annual cash inflows $24,000 Part 2 (Do not round calculations) Discount rate 16% Lump Sums Annuities Item Cash Flow Cost of the machine-0- $(90,000) 1.0000 $(90,000) Overhaul required 5 $(7,500) 0.4761 $(3,571) Annual cash inflows 1 8 $24,000 4.3436 $104,246 Salvage value 8 $6,000 0.3050 $1,830 Net present value $12,505 * Enter 0 if the cash flow occurs at beginning of project **Enter formulae for the factors; do not round your answers Year of Cash Flow* First Year of Annuity Last Year of Annuity Present Value Factor** Present Value Problem 13-27...
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Chapter13Solution - Excel Templates Chapter 13 Student...

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