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(b) A supplier offered to supply electronic parts with a cost of 50% cheaper than the above proposal. However, the project life is expected to

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(b) A supplier offered to supply electronic parts with a cost of 50% cheaper than the above proposal. However, the project life is expected to be extended to twelve (12) years due to the procurement delay. The profits are expected to be the same (as previous) for that extended years, and machine maintenance costs can be neglected after the last maintenance. What would happen to the Net Present Value (NPV) and comment whether the decision shall be changed. (10 marks) (b) A supplier offered to supply electronic parts with a cost of 50% cheaper than the above proposal. However, the project life is expected to be extended to twelve (12) years due to the procurement delay. The profits are expected to be the same (as previous) for that extended years, and machine maintenance costs can be neglected after the last maintenance. What would happen to the Net Present Value (NPV) and comment whether the decision shall be changed. (10 marks)

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