ABC Ltd is considering a new business opportunity. They will need to purchase a new machine for R1500000. Their old machine can be traded in for R250000 and the new machine can be sold for R250000 after 3 years. Because of increased productivity, the company expects to save on average R350000 per year. The company expects a minimum rate of return of 12%. Determine the Net Present Value of this machine and also indicate if this will be a good or bad decision. Present Value Year Cashflow R Discount Factor R 350000 2 0.797 0.712 1 3 Total cash inflows Less Cash outflow Net present value Only state GOOD or BA D Decision