BUS 309 T: ASSIGNMENT: THIS ASSIGNMENT IS GRADED WITH A WEIGHTAGE OF 10% K. Machine will be Partin... 1. The cost of capital is 9% 2. Company pays tax at 30% 3. If the replacement decision is to take place,the trade receivables will be sh.500,000,trade payables will be sh. 680,000 and the inventory will be sh.700,000. (assume the status will remain throughout the period) 1,880,000 4. Installation costs for new Machine will be sh.30,000. 5. The Supplier of the Machine requires sh.38,000 to deliver it to the business premises. 6. The Company uses the reducing balance method to depreciate all its machines at the rate of 8% P.A. 7. Machine K can be sold now at Sh.300,000. Required: Use both discounting and non-discounting methods to evaluate the suitability of the replacement decisions (40 marks)