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please answer 22 and 23 Luiting ome content might be missing or displayed improperly. 22) The management of Techlow Inc. is planning to purchase a

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please answer 22 and 23

Luiting ome content might be missing or displayed improperly. 22) The management of Techlow Inc. is planning to purchase a new production machine at the cost of 101,000. The extra cashflow because of this investment will be 34,000 in the first year, 32,000 in the second year, 31,000 in the third year and 30,000 in the fourth year. The minimum desired rate of return for the investment is 10% and the machine has no salvage value. Use the above figures to explain the steps that Techlow Inc. must take to find out the NPV of this investment 23) The management of Techlow Inc. has two investment options to pick one from. Option one is to purchase a new production machine and option two is to buy a used production machine. Option 1 provides the following cashflows and discount factors yro yrl vr2 yr3 204000 $7000 65000 64000 Discount factor .9091 0.8264 0.7513 V14 60000 0.6830 Option 2 provides the following cashflows and discount factors yro yrl yr2 yr3 198000 $6000 62000 62000 Discount factor 0.9091 0.8264 0.7513 yr4 59000 0.6830 Use the above figures to explain how Techlow Inc, can decide which option to choose 24) The management of Techlow Inc. has used the net present value investment appraisal technique to determine the viability of a proposed investment. They came up with the following figures: yr4 yro 31000 30000 10200 14000

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