# Net Present Value of a New Machine and Finding Missing Contribution Margin Amounts

## Transcribed Text

Problem 1 The initial coSt of a new machine is \$500,000, annual revenules are expected to be 100,000 in year 1 with an annual increase of 5% in years 2-5, the annual expenses are expected to be 80% of revenues The project Salvage value is 20,000 with five years useful like, straight-line depreciation used CoSt of capital of 11% is used in the investment What is the net present value? Problem 2 Identify the missing price per visit, variable costs per visit, number of visits, contribution margin, fixed coSts, and/or net income. Price Per Var. Costs Number Contribution Fixed Net Visit Per Visit of Visits Margin Costs Income \$80 B 3,000 \$180,000 F \$80,000 \$75 \$20 c \$130,000 \$90,000 G A \$35 3,250 D \$78,000 \$125,000 \$60 \$40 2,000 E \$60,000 H : A A. (\$20,000) B. \$23.50 - : B C. \$40,000 C D. \$40,000 D E. 2,364 - E F. \$35,000 F G. \$20

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