The management of Darwin Company are deciding between purchasing Machine Alpha or Beta to improve their production capacity and efficiency.

Machine	Alpha	Beta
Initial cost	$200,000	$230,000
Expected life	5 years	5 years
Scrap value expected	$10,000	$15,000
Expected cash inflows	$	$
End year 1	80,000	100,000
2	70,000	70,000
3	65,000	50,000
4	60,000	50,000
5	55,000	50,000

Required: a) Calculate the accounting rate of return for each machine. b) Calculate the undiscounted payback period of each machine. c) Calculate the net present value of each machine. d) Advise Darwin as to which machine they should purchase. Why? e) Explain the strengths and limitations of each investment appraisal method used in (a) to (c). f) Critically evaluate the key benefits and limitations of using budgets as a tool for strategic planning.