In problem 6.1, assume that the 2000 level is the best estimate of annual demand for Easton

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In problem 6.1, assume that the 2000 level is the ‘best estimate’ of annual demand for Easton Ltd, and that only Machine A is available.

(a) Should the business acquire Machine A on the basis of its NPV?

(b) Carry out a sensitivity analysis on the decision recommended in (a).

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