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Q7. ABC PTY LTD, is purchasing a machinery for their new juice factory at Wollongong at a total cost of $3.25 million. The old machine

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Q7. ABC PTY LTD, is purchasing a machinery for their new juice factory at Wollongong at a total cost of $3.25 million. The old machine is obsolete and needs a replacement. The after-tax net income from this investment is expected to be $750 000 for the next 5 years. Annual depreciation expense was $650 000. The company's cost of capital is 17 percent. (10 Marks). a. b. What is the discounted payback period? (1 Mark for workings and 1 Mark for correct answer to equal a total of 2 Marks). Calculate the ARR. (1 Mark for workings and 1 Mark for correct answer to equal a total of 2 Marks). What is the NPV on this investment? (2 Marks for workings and 1 Mark for correct answer to equal a total of 3 Marks). Calculate the IRR. (2 Marks for workings and 1 Mark for correct answer to equal a total of 3 Marks). c. d

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