Big Al gives his worker‘s a one hour lunch and two fifteen minute breaks each day. He believes that a
cold soda machine would be appreciated by his workers. and an appreciated worker is a good worker.
He has priced a machine at a national member only warehouse for $2.250. The machine should be
usable for 3 years. after which it would be inefficient. obsolete and would have to be disposed of at the
dump. Big Al believes that 16 cans a day will be purchased. The plant is open five days a week. 50
weeks per year. A case of soda (24 cans) costs $6.00 and Big Al believes that a price oi $.60 per
can would win him good will.
What is the estimated annual sales in cans of soda?
What is the contribution mar in er can oi soda? rounded to two – laces.
How many cans of soda must be sold each ear to breakeven? Round u to zero – aces. m.m cans
Annual incremental cash inflows from the soda machine? rounded to two – aces. $3.”
What is the payback o riod in ars? rounded to two laces. twat ars
What is the internal rate of return. Pick the closest interest rate from the tables on o – e 18.
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