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Q-2 Corp. is planning to buy production machinery costing $100,000. This machinery's expected useful life is five years, with $10,000 as residual value. The machinery

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Q-2 Corp. is planning to buy production machinery costing $100,000. This machinery's expected useful life is five years, with $10,000 as residual value. The machinery will require maintenance cost of $10,000 at the end of year 3. Corp. uses a discount rate of 10% and has calculated the following data pertaining to the purchase and operation of this machinery: 5 marks Year Estimated annual net cash inflow 1 $60,000 2 30,000 3 20,000 4 20,000 5 20,000 Calculate the net present value and suggest whether to buy this machinery Q-3 Write a note on sources of finance 3 marks

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