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In keeping with its plans for expansion, the company is appraising the production and sale of a new designer energy drink. This would involve the
In keeping with its plans for expansion, the company is appraising the production and sale of a new designer energy drink. This would involve the acquisition of a new machine with a purchase price of R which is expected to have a useful life of six years and a salvage value of R The installation cost of the machine is R units are expected to be sold annually. The net profit is expected to be R perIn keeping with its plans for expansion, the company is appraising the production and sale of a new designer energy drink. This would involve the acquisition of a new machine with a purchase price of R which is expected to have a useful life of six years and a salvage value of R The installation cost of the machine is R units are expected to be sold annually. The net profit is expected to be R per unit. The straightline method of depreciation is used by Colatonic Ltd The companys cost of capital is If approved, the implementation date would be January Calculate the internal rate of return IRR and weighted average cost of capital if the initial investment is funded by ordinary shares and debt in the ratio : respectively and the cost of ordinary shares are and respectively. Your answer must include the values and ordinary shares and debt
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