7 Owen pic is planning to buy a machine which will cost 400,000 and which is expected to generate new cash sales of 300,000 per year. The expected useful life of the machine will be seven years, at the end of which it will have zero scrap value. Initial investment in working capital of 70,000 will be needed. The company cost of capital is 10% and taxation may be ignored. Annual cost is expected to be 100,000. Evaluate the purchase of the machine using ARR and NPV. Possible Answers ARR 48%, NPV = 458,500 ARR 53%, NPV = 539,510 ARR 53%, NPV = 458,500 ARR 48%, NPV = 539,510 None of the options