Question
Q1. A Company is contemplating to purchase a machine two machines X and Y are available, each costing Rs.700000 in comparing the profitability of the
Q1. A Company is contemplating to purchase a machine two machines X and Y are available, each costing Rs.700000 in comparing the profitability of the machines, a discount rate of 9% is to be used. Earnings after tax are expected as follows: Year Cash Flow (Rs.) 1 2 3 4 5 Machine X 180000 210000 240000 100000 150000 Machine Y 50000 200000 250000 200000 250000 Indicate which of the machines would be profitable using the following methods of ranking investments proposals (a) Pay back method (b) Discounted PBP (c) Net present value method (d) Internal Rate of Return 02. Compute the Weighted Average Coat of Certal G Ans
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