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(c) Based on your answers on (b), determine the acceptance criteria of each evaluation method and the best project to make an investment. [10 marks]

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(c) Based on your answers on (b), determine the acceptance criteria of each evaluation method and the best project to make an investment.

[10 marks]

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(b) Halim is the Finance Manager of a textile company. He was asked to evaluate two machines and choose the most profitable one. The cost of each machine is RM165,000. The estimated cash flow for the machines are given as follows. Year 1 2 3 4 5 6 ii. The cost of capital is 14%. Calculate the investment by using the evaluation methods below: i. Payback Period Net Present Value Project A (RM) 35,000 35,000 35,000 35,000 35,000 35,000 iii. Profitability Index Project B (RM) 25,000 36,000 38,000 50,000 62,000 65,000 [10 marks]

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