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Shella Bakery Sdn Bhd is also considering an investment on new updated machinery of RM500,000 expected to generate substantial cash inflows over the next five

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Shella Bakery Sdn Bhd is also considering an investment on new updated machinery of RM500,000 expected to generate substantial cash inflows over the next five years. Unfortunately, the annual cash flows from the investment are uncertain, thus the following probability has been established: At the end of its five-year life, the machinery is expected to be sold for RM50,000. The cost of capital is 8%. Determine whether the investment on machinery should be undertaken. (6 marks)

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