Adding information : Net present value Machine A initial investment 440,000 NPV 571,986,495 life (n) 4years Machine B initial Investment 525,600 NPV 532,911.89 (n) 5yearsMachine C initial investment 884,600 NPV 293,837.47 (N) 3 years Can you explain in details which budget you will choose to help the company to improve ?Traditional Incremental Zero-based Activity -based Explain why and can you define the diffrents budgets please?

ARR=40,000/396,000=0.101 Machine Life (years) Average Average ARR Initial Total Profit Investment (E) Annual Investment (E) Profit (E) (E) $440,000 E160,000 $40,000 $396,000 0.101 A $525,600 5 2473,280 0.079 B 187,500 $37,500 0.096 C $884,600 3 $230,500 176,833.33 2797,040 I. Payback Period: Payback times give an idea of how long it takes for each machine to recover its initial investment, based on the annual cash flow it generates. Machine A Annual Cash Flow - Total Profit + Depreciation Total Profit - Total Sales - Total Costs = ($600 x 1000) - $440,000 = $160,000 Depreciation = Initial Investment - Salvage Value / Life of the machine Salvage Value = Initial Investment * 0.2 = $440,000 * 0.2 = 188,000 Depreciation = ($440,000 - $88,000) / 4 = $88,000 Annual Cash Flow = $160,000 + $88,000 = $248,000 Payback Period = $440,000 / E248,000 - 1.77 years + Machine Total Profit (f) Depreciation (f) Annual Cash Payback Period Flow (E) (years) E160,000 188,000 E248,000 1.77 $187,500 184,496 1272,996 1.93 C $230,500 1235,227 1465,727 1.90