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Q4 For a mining project, need to by a conveyer. There are two conveyers available in the market Following tables show the initial investment
Q4 For a mining project, need to by a conveyer. There are two conveyers available in the market Following tables show the initial investment and the annual return of these two conveyers. Using this information, answer the following questions: Which conveyer is the better choice according to the Return on Investment (ROI) method? Your company's expected rate of return is 15% and the annual inflation rate is 4%. Using the Net Present Value (NPV) method, which conveyer is the better choice? Initial investment Conveyer A $120,000 Annual earning Conveyer A Conveyer B Conveyer B $135,000 Discount Present value factor Conveyer A Conveyer B Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $50,000 $45,000 $40,000 $30,000 $28,000 $25,000 $60,000 $58,000 $45,000 $30,000 $28,000 $16,000
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