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should the company acquire the machine? Use the net present value method. 3. Omega Company is considering to buy a new machine. Two machines are

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should the company acquire the machine? Use the net present value method. 3. Omega Company is considering to buy a new machine. Two machines are being evaluated. Machine X costs P 400,000 and has an expected useful life of 5 years. Machine Y costs P 300,000 also with a useful life of 5 years. The operating and maintenance costs of Machine X total P 75,000, while that of Machine Y, P 100,000. a) Which of the two machines should you recommend for acquisition if the cost of money is 20%?B) If the cost of money were to be 12%, instead of 20% will your answer be a) remain the same? Why? C) Supposing the useful life of Machine X is 8 years while that of Machine Y, 5 years, and the cost of money is 18%, which machine will you choose? Why? D) Assuming that the useful life of Machine Xis 8 years while that of Machine Y, 5 years, but the cost of money has gone up to 35%, will your decision be c) remain the same? Why? tanagerial Accounting 110

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