Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Poppy company has 50,000 baht to invest for a new machine, but there are 2 choices from 2 countries: China and New Zealand. Information

1. Poppy company has 50,000 baht to invest for a new machine, but there are 2 choices from 2 countries: China and New Zealand. Information is indicated that:

China: the cost of machine is 45,000 baht and the machine can use for 5 years. Moreover, the machine can sell 2000 baht after 5 year as a savage value. This machine can increase sales as 27,000 baht per year, and increase cost 8000 baht per year (12% as an acceptable rate of return).

New Zealand: the cost of machine is 25,000 baht and the machine also can use for 5 years. The machine can increase sales as 12000 baht per year, and increase cost 2000 baht per year (10% as an acceptable rate of return).

Taxes rate is 20% of corporate profit. If the company is considering to buy the new machine from 1 out of 2 countries, which country should company invest in? and why?

1.1 If the company uses "Payback Period"

1.2 If the company uses "Net Present Value"

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hospitals What They Are And How They Work

Authors: Don Griffin, Donald J Griffin

3rd Edition

076372758X, 9780763727581

More Books

Students also viewed these Accounting questions

Question

=+b) Are the conditions for two-way ANOVA met?

Answered: 1 week ago