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Ames Computer pengawet will remove of 56.000.000 The will de 300.000 che in years The wave we will be $120.000 The expected the flow for 4 ya was follows Y Cash flow (5) 2.100.000 2.800,000 2 2.450,000 1 2,450,000 10 decreto you 1,100,000 2005.000 1.100.000 Required: A Calculate ARR B Decide whether the company will purchase new equipment or not if the expected rate of retum.is ARR method . Calculate the payback period Activate Wir Go to 129 What is the disadvantage to the computery acer 10% decree from your 2.205.000 1,300,000 1.300.000 Required A Calealate ARR Decide whether the company will purchase winton if the expected rate of this 129 What is the dead to the comfthey wewning the ARR method C Calculate the payback period . . Decide whether the company will accept ou reject the proposal if the twrpted gasbeck period 2 years What is the advantage to the company if they were payback method E. Calculate NPV, if the required rate of return is 124 E Should the company accept of reject the project and why? What is the advantage to use the NPV method for capital budgeting Activate Windows Anar - 31200 660 SM E - E rac Ajman printing Company is considering purchasing a new equipment. It will require an initial investment of $6,000,000. The new project will provide $1,200,000 constant net income each year, over the next four years. The scrap value for new equipment will be $120,000. The expected cash flow for the next 4 years are as follows: Year Cash flow (5) 2,800,00 2,800,000 2 2,450,000 2.450,000 3 10x decrease from year 2,205,000 4 1 300,000 1,300,000 Required: I A. Calculate ARR B. Decide whether the company will purchase new equipment or not if the expected return is 12% and what is the disadvantage to the company if they are using the ARR method? C. Calculate the payback period D. Decide whether the company will accept or reject the proposal if the targeted payback period is 2 years and what is the advantage to the company if they are using the payback method? E. Calculate NPV, If the required rate of return is 12%. F. Should the company accept or reject the project and why? What is the advantage to use the NPV method for capital budgeting