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				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 $2,050. The machine should be usable for 6 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 8 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 $5.76 and Big Al believes that a price of $.65 per can would win him good will. What is the estimated annual sales in cans of soda? What is the contribution margin per can of soda? (rounded to two places, $#.##) How many cans of soda must be sold each year to breakeven? (Round up to zero places, ###,### cans) Annual incremental cash inflows from the soda machine? (rounded to two places, $#.##) What is the payback period in years? (rounded to two places, #.## years) If the time value of money is 12% per year what is the net present value? What is the internal rate of return. Pick the closest interest rate from the tables on page 18.

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