Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3720 a year to operate, as opposed to the old machine, which costs $4100 per year to operate. Also, because of increased capacity, an additional 21,200 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $8200 and the new machine costs $31,200. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.):
A. $6080
B. $2120
C. $2500
D. $380
Answer: C
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