Can Someone help me with this question? Wendel\'s Donut Shoppe is investigating

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Can Someone help me with this question?

Wendel's Donut Shoppe is investigating the purchase of a new $52,000 donut- making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of 56,900 per year. In addition, the new machine would allow the company to produce one new style of donut. resulting in the sale of 1,800 dozen more donuts each year. The company realzes a contribution margin of S2 50 per dozen donuts sold. The new machine would have a six-year useful life Click here to vnew Exhibit 13B-1 and Exhibit 138.2. to determine the appropriate discount factor(s) using ables Required utlarmual cash nious stoc hmachin fer caa budgetng purposes? Annual savings in part-time help Added contribution margin from expanded sales Annual cash inflows 6,900 4,500 11400 2 Find the internal rate of return promised by the new machine to the nearest whole percent Internal Rate of R Factor Number of years Internal rate of retu Ghoose Numerator: Choose Denominator: rn investment required Annual cash inflow Factor 52.000 s 11 400 4 561 In adition to the data given prevously, assume that the machine will have a 516 835 salvage value the end of six years Under these canditions compute the internal rate of return to the nearest whole percent (Round your final aniswer to nearest whole percentage ) ate of returin

Explanation / Answer

1 Annual savings in part Time help 6900 Additional contribution margin from expected sales 4500 =1800*2.5 Annual Cash Flow 11400 2 Factor Number of years Internal rate of return 52000/11400= 4.561 6 8% 3 Internal rate of return = 14%

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