The estimated PBDT over the five years for both machines are given as follows: Existing grinder New grinder Year Sh. Sh. 130,000 215,000 120,000 215,000 110,000 215,000 100,000 215,000 90,000 215,000 The company uses straight line method of depreciation for both machines Required: i. Calculate the initial investment associated with replacement of existing grinder with the new one. ii. Determine the incremental operating cash flows associated with proposed grinder replacement. iii. Calculate the terminal cash flow expected from the proposed grinder replacement Should the new grinder be purchased?

The estimated PBDT over the five years for both machines are given as follows Existing grinder New grinder Sh Sh Year 130,000 215,000 215,000 120,000 110,000 215,000 100,000 215,000 90,000 215,000 The company uses straight line method of depreciation for both machines Required: i. Calculate the initial investment associated with replacement of existing grinder with the new one ii. Deter ne the incremental operating cash flows associated with proposed grinder replacement iii. Calculate the terminal cash flow expected from the proposed grinder replacement Should the new grinder be purchased? The estimated PBDT over the five years for both machines are given as follows Existing grinder New grinder Sh Sh Year 130,000 215,000 215,000 120,000 110,000 215,000 100,000 215,000 90,000 215,000 The company uses straight line method of depreciation for both machines Required: i. Calculate the initial investment associated with replacement of existing grinder with the new one ii. Deter ne the incremental operating cash flows associated with proposed grinder replacement iii. Calculate the terminal cash flow expected from the proposed grinder replacement Should the new grinder be purchased