A company is considering buying a new coffee maker. This mac…
A company is considering buying a new coffee maker. This machine will replace an old coffee maker that still has a useful life of 6 years. The new machine will cost $3,620 a year to operate, as opposed to the old machine, which costs $4,630 per year to operate. Also, because of increased capacity, an additional 20,200 cups a year can be produced. The company makes a contribution margin of $0.05 per cup. The old machine can be sold for $7,200 and the new machine costs $30,000. The incremental annual net cash inflows provided by the new machine would be: