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A company is considering whether to purchase a new machine. Machines A and B are available for $80,000 each. Earnings after taxation are as follows:
A company is considering whether to purchase a new machine. Machines A and B are available for $80,000 each. Earnings after taxation are as follows: YEAR MACHINE A MACHINE B 1. 24,000 8,000 2. 32,000 24,000 3. 40,000 32,000 4. 24,000 48,000 5. 16,000 32,000 Evaluate the two alternatives using the following: a. payback method b. rate of return on investment method c. net present value method You should use a discount rate of 10%
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Management Accounting Information for Decision-Making and Strategy Execution
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
6th Edition
137024975, 978-0137024971
