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Boleh Score Berhad is planning to buy a new machine. The proposed machines are Saver model and Super Saver model. Since both machines primarily perform
Boleh Score Berhad is planning to buy a new machine. The proposed machines are Saver model and Super Saver model. Since both machines primarily perform similar functions, the company will only choose either one. The cost of capital for the company is 12 percent. Below are the expected cash flows for both models: Year Saver (RM) Super Saver RM 0 (210,000.00) (290,000.00) 1 65,000.00 70,000.00 2 65,000.00 80,000.00 3 65,000.00 65,000.00 4 65,000.00 10.000.00 5 65,000.00 90,000.00 REQUIRED: a. Compute the payback period for both machines 14 marks! b. Compute the nat present value for both machines 15 marks c. Compute the profitability index for both machines 14 marks! 4. Compute the internal rate of retum for Saver model only 14 marks c. Determine which model should the company choose. Justify your answer [2 marks
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