Question
A printing machine investment demands 600 000 investment. Its economic life time is 10 years. Residual value has been estimated to be 180 000 .
A printing machine investment demands 600 000 investment. Its economic life time is 10 years. Residual value has been estimated to be 180 000 . The investment would decrease the current annual costs with 430 000 but on the other hand would cause new annual maintenance costs 280 000 . For this type of investment the company sets 10 % minimum profit demand and maximum four years payback time. Count 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
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