0.7513 0.6380 0.7118 0.6355 0.6750 0.5921 0.1432 0.6 107 0.5523 Required: Calculate the ARR on initial capital for both machines b. Calculate the ARR on average capital for both machines Calculate the net present value (NPV) for machine A and machine B. d. Based on the NPV, identify the machine that the company should choose giving ONE reason for your choice. e. State TWO advantages of using the NPV method of investment appraisal. [ State TWO advantages of using the payback method of investment appraisal. (1 mar (2 mark (2 marka Amited needs to purchase a machine to use in its operations. The initial cost and net cash stomach machine for four years is shown in the table below. The opportunity cost for ting in the machines i 14 Cash Flow Machine A Machine B Initial Cost (130,000) (70,000) Net Cash inflows/profit Year 1 85,000 13,000 Year 2 85.000 13,000 Year 3 13,000 85,000 85.000 Year 4 13,000 Total inflows profit 340,000 52,000 Discount factor table 10% 12% Year 14% 16%