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Suppose you are contemplating to undertake the following two machines, Machine A and Machine B. The cashflows associated with each machine are as follows- Machine
Suppose you are contemplating to undertake the following two machines, Machine A and Machine B. The cashflows associated with each machine are as follows- Machine A Year CF 0 1 2 3 4 5 -10,00,000 1,00,000 3,50,000 2,00,000 4,50,000 6,50,000 Machine B CF -117,000 40,000 35,000 25,000 20,000 40,000 Suppose you require 12 percent return on your investment. Calculate: (a) Discounted Payback Period of Machine A and B (b) Net Present Value (NPV) of Machine A and B (d) Which Machine would you recommend? Why
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