# Big Al gives his worker’s a one hour lunch and two fifteen minute breaks each day.

Question

help me I am having a lot of difficulty trying to solve this.

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 \$2,100. The machine should be usable for 5 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 10 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 \$6.48 and Big Al believes that a price of \$.85 per can would win him good will.

The estimated annual sales in cans of soda is ?

What is the contribution margin per can of soda?

How many cans of soda must be sold each year to breakeven?

Annual incremental cash inflows from the soda machine?

What is the payback period in years?

If the time value of money is 12% per year what is the net present value?

What is the internal rate of return.