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Question 1: Using the evaluation of various Capital Budgeting projects methods choose which project the company should undertake? Explain your decisions. Discount rate= 10% Years
Question 1: Using the evaluation of various Capital Budgeting projects methods choose which project the company should undertake? Explain your decisions. Discount rate= 10% Years 0 1 2 3 4 CF Project A -$100k +$50k +$50k +$50k 0 0 CF Project A $100k +$20k +$20k +$40k +$40k +$80k 5 Question 2: A company is considered the purchase of a machine. the machines A and B are available for $80,000 each. Earnings after taxation are as: Year Machine A Machine B 24,000 8,000 2 32,000 24,000 3 40,000 32,000 4 24,000 48,000 5 16,000 32,000 Evaluate the two alternatives according to (a). Payback Method, (b). Rate of Return Method and (c). Net Present Value Method (A discount rate of 10% is to be used). Explain your decisions
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