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Company A is interested in purchasing a new printing machine. The cost of the machine will be 50.000 TL, and an additional 10.000 TL will

Company A is interested in purchasing a new printing machine. The cost of the machine will be 50.000 TL, and an additional 10.000 TL will be given for its transportation and installation. In case of this purchase, it is expected that the Net Working Capital requirement will increase by 5,000 TL. The depreciation method of this machine, which has a useful life of 4 years, is taken into account as linear and its scrap value is zero for tax purposes. Machinery investment will increase company sales by 110,000 TL annually, while operating expenses will increase by 70,000 TL. If it is assumed that the machine can be sold for 10.000 TL at the end of 4 years and the corporate tax rate is 40% and the capital cost of the company is 10%, this investment; a) Should this investment be made according to the Net Present Value and Internal Rate of Return methods? b) How many years is the discounted payback period?

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