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3. A production machine purchase amounts to 800000. Its economic lifetime is 10 years. Residual value has been estimated to be 70000. The investment would

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3. A production machine purchase amounts to 800000. Its economic lifetime is 10 years. Residual value has been estimated to be 70000. The investment would yield 230000 extra revenue per year and the annual running costs are 120000. The company's profit demand for this type of investment is 12% and it allows maximum five years' payback time for its investments. Calculate the profitability of the investment with the following methods: a) Net Present Value method b) Annuity method c) Internal rate of interest method d) Payback method 6p

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