Wendell’s donut shoppe is investigating the purchase of a new $18,600 donut-making machine. the new machine would permit the company to reduce the amount of part-time needed, at a cost savings of $3,800 per year. in addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,000 dozen more donuts each year. the company realizes a contribution margin of $1.20 per dozen donuts sold. the new machine would have a six-year useful life. click here to view exhibit 13b-1 and exhibit 13b-2, to determine the appropriate discount factor(s) using tables. required: 1. what would be the total annual cash inflows associated with the new machine for capital budgeting purposes? (round your final answer to the nearest whole dollar amount.) 2. what discount factor should be used to compute the new machine’s internal rate of return? (round your answers to 3 decimal places.) 3. what is the new machine’s internal rate of return? (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.) 4. in addition to the data given previously, assume that the machine will have a $9,125 salvage value at the end of six years. under these conditions, what is the internal rate of return? (hint: you may find it to use the net present value approach; find the discount rate that will cause the net present value to be closest to zero.) (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.)

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?