Soda Manufacturing Company Provides Vending Machines for Soft-Drink Manufacturers

question 78

Multiple Choice

Soda Manufacturing Company provides vending machines for soft-drink manufacturers.The company has been investigating a new piece of machinery for its production department.The old equipment has a remaining life of four years and the new equipment has a value of $91,110 with a four-year life.The expected additional cash inflows are $30,000 per year.What is the internal rate of return?

• A) 12%
• B) 16%
• C) 10%
• D) 8%

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Definitions:

Units Sold

The total quantity of products sold by a business during a specific period.

Period Costs

Costs that are not directly tied to the production process and are expensed in the period in which they occur, such as selling, general, and administrative expenses.

Financial Reporting

The process of disclosing financial information and data about a company's financial performance, position, and cash flows to stakeholders and the public.

Units

The quantitative units of product or service in accounting or inventory management.