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Data relating to Randall Lidi's single product are as follows: Selling price Direct materials Direct labour Overhead (60% fixed) Gross Profit $5.35 0.83 0.81 1.04

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Data relating to Randall Lidi's single product are as follows: Selling price Direct materials Direct labour Overhead (60% fixed) Gross Profit $5.35 0.83 0.81 1.04 $2.67 The company currently produces 50484 units. Randall Ltd. is considering purchasing a new machine that is expected to decrease variable costs by 12%. The expected useful life of the new machine is 9 years. Assuming a weighted average cost of capital of 8%, what is the net present value of the increase in contribution margin relating to this investment? Select one: O a. There is a decrease in the contribution margin. Ob. $77808 Oc. $178750 Od $6231

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