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Capital Budgeting the finance department of ishka ( pty ) Ltd is faced with a choice between two machijes A , B which differ in
Capital Budgeting the finance department of ishka ptyLtd is faced with a choice between two machijes AB which differ in their production characteristics and capabllities the current cost of capital of the company is the following information regarding the two machines is available Details: cost proce, machine A : Rmachine B : residual value: machine B : annual income after depreciation and income tax machinne A : machine B required working capital machine A : machine B : expetedd useful life : machije A : years Machine B : years required apply the following methods in capital budgeting to evaluate the two mutually exclusive options available to ishka pty Ltd and comment on the results of each net present value round off your present value interest factor to decimal place as illustrated in the table below : round off the present value amount to decimal place year cashflow present value interest factor at present Value year internal rate of return IRR using and to interpolate round of your answer to decimal places payback period accounting rate of return B make a final recommendation to the management of ishka pty Ltd based on the net present value and advice whether to invest in project A or project B
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