Question
MedLife Pharmaceuticals is evaluating three new drug manufacturing machines. The relevant details are as follows. The corporate tax rate is 27%, and the cost of
- MedLife Pharmaceuticals is evaluating three new drug manufacturing machines. The relevant details are as follows. The corporate tax rate is 27%, and the cost of capital is 8%.
Particulars | Machine M1 (₹) | Machine M2 (₹) | Machine M3 (₹) |
Initial investment | 5,00,000 | 4,50,000 | 6,00,000 |
Estimated annual sales | 6,50,000 | 6,00,000 | 7,50,000 |
Cost of production: | |||
Direct material | 55,000 | 45,000 | 60,000 |
Direct labour | 65,000 | 55,000 | 70,000 |
Factory overhead | 75,000 | 65,000 | 80,000 |
Administration cost | 40,000 | 35,000 | 45,000 |
Selling & Distribution cost | 30,000 | 25,000 | 35,000 |
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
9th edition
978-1285183244, 128518324X, 978-1285779263, 1285779266, 978-1285183237
