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Suzy is a company located in Dubai. The company manufactures machine parts in Oman. It is currently involved in making a decision concerning the acquisition

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Suzy is a company located in Dubai. The company manufactures machine parts in Oman. It is currently involved in making a decision concerning the acquisition of new machining tool. Two different versions of the tool are available: Y& Z. The results of NPV and IRR of the two alternatives are summarized below: Tools Net Present Value (NPV) at 6% Internal Rate of Return (IRR) 10.5% AED 68.36 m AED 55.52 m 10.8% Suzy faces a perfect capital market, in which the interest rate for the projects' risk level is 6%. Required: (a) On the basis of NPV and IRR findings above, formulate your investment decision advice. (2 marks) (b) Using NPV decision rule for mutually exclusive projects, indicate which tools the company should accept. (2 marks) (c) Using IRR decision rule for mutually exclusive projects, indicate which tools the company should accept. (2 marks) (d) Do your conclusion in (b) and (c) similar. If no which one is more superior to the other? (2 marks) (e) State clearly any limitations and assumptions that you made in your calculations

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