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PQR Company is considering the purchase of one of two new machines. The company's cost of capital is 12% and the tax rate is 33%.
- PQR Company is considering the purchase of one of two new machines. The company's cost of capital is 12% and the tax rate is 33%. Below are the details:
Particulars | Machine A | Machine B |
Cost of machine | 19,00,000 | 21,00,000 |
Expected life | 5 years | 5 years |
Annual Income (before Tax & Depreciation) | 5,50,000 | 6,25,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Internal Rate of Return (IRR) b. NPV c. Payback period
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Operations management processes and supply chain
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra
9th edition
9788131728840, 136065767, 8131728846, 978-0136065760
