REVIEW QUESTIONS 1. Fabulous Corporation is considering purchasing a machine for production purposes. The two alternatives are MACHINE Y and MACHINE Z that will cost RM140 000 and RM 148 000 respectively. The expected profits are as follows: Year MACHINE Y 0 (140 000) MACHINE Z (148 000) 70 000 1 50 000 2 86 000 62 000 3 73 000 49 000 4 59 000 65 000 Scrap Value 3800 The machines have four years of expected of life. The cost of capital for both machine is 10%. You are required to assist the management to determine which machine should be accepted by using: a. Payback period b. Average Rate of return c. Net present value d. Profitability index e. Which machine should the company choose? State your reason