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A manufacturing firm purchased a machine for RM80,000. The firm had to pay sales tax of RM 1, 200 on this purchase. Additionally, the firm

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A manufacturing firm purchased a machine for RM80,000. The firm had to pay sales tax of RM 1, 200 on this purchase. Additionally, the firm has to pay RM800 for transportation charges, RM5,000 to prepare the site before installation, and RM8,000 for labor cost to install the machine in the factory. The useful life of the machine is FIVE (5) years and the estimated salvage value is RM 10,000. The machine produces a product which generate yearly revenue of RM30,000. The minimum attractive rate of return is 10% per year. i. Construct a cash flow diagram based on the above estimates. ii. Assess the internal rate of return (IRR) using equivalent Present Worth (PW) relation. Show your calculation. iii. Evaluate the discounted payback period of the above investment

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