Bugle's Bagel Bakery Is Investigating the Purchase of a New

question 38

Multiple Choice

Bugle's Bagel Bakery is investigating the purchase of a new bagel-making machine. This machine would provide an annual operating cost savings of $3,650 for each of the next four years. In addition, this new machine would allow the production of one new type of bagel that would result in selling 1,500 dozen more bagels each year. The company earns a contribution margin of $0.90 on each dozen bagels sold. The purchase price of this machine is $13,450, and it will have a four-year useful life. Bugle's discount rate is 14%. (Ignore income taxes in this problem.)
- The internal rate of return for this investment is closest to which of the following?

• A) 14%.
• B) 16%.
• C) 18%.
• D) 20%.

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Definitions:

Segregated

The act or state of separating groups of people or things apart from one another based on various factors like race, gender, or religion.

Homeless Population

Individuals who lack stable, permanent, and adequate housing.

Invisible

Not visible; not perceivable by the eye or immediately obvious to the aware mind.

Class Consciousness

The recognition of social inequality on the part of the oppressed, leading to revolutionary action.