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2. The expenses to be made and the revenues to be earned by a company for a machine with an economic life of 6
2. The expenses to be made and the revenues to be earned by a company for a machine with an economic life of 6 years are given in the table below. The annual capital cost ratio is 22%. According to this; Year Cost Revenue 0 1,300 1 a. Calculate rate of return value of the investment and evaluate the suitability of the investment. (2 P) 500 1,200 2 500 1,100 b. Determine simple payback time and corrected payback time of the considered investment 3 (10 P). 600 1,000 4 1,000 800 5 450 900 6 400 600
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