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Muno ple is a Zimbabwean manufacturing company who are considering expansion into the UK. They have been looking at a possible factory site Ih the

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Muno ple is a Zimbabwean manufacturing company who are considering expansion into the UK. They have been looking at a possible factory site Ih the Midlands area in England. Due to the unstable political situation in the UK, they expect to sell the factory they buy after 5 years. The factory and machinery will be bought outright for f800,000. The factory bulding is worth f200,000 and machinery makes up the balance of the purchase price. The factory building will not fall in value during the project and the full amount will be recovered on sale. The machinery has a residual value of 27,000 The annual cash flows are as follows: Sales revenue f195,000, increasing by 8.5% each year Running costs 68500 , increasing by 6.5% each year. Other expenses include 6650 per month for variable overheads. This value will increase by 2% every year. The company has a current cost of capital of 10%. Muno use a template for their calculations and this can be found on the link below: Capital Budgeting Template (click to downioad) a) Calculate the NPV (Net Present Value) of the new machine. Round off your answer fo the nearest whole number with no f sign. If the number is a negative value, include the minus sign egs. -100coo Make use of the template provided above and do not round off your colculations until the final answer. a) Calculate the NPV (Net Present Value) of the new machine. Round off your answer to the nearest whole number with no. E sign. If the number is a negative volue, include the minis sign eg. - 100000 Make use of the template provided obove and do not round off your colculotions untif the final onswer. b) Calculate the payback period for the new machine Years months

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