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undefined 7- Businesses spend large amount of money on assets. To give decision where to spend money they evaluate different business investments. For evaluation they
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7- Businesses spend large amount of money on assets. To give decision where to spend money they evaluate different business investments. For evaluation they use capital budgeting models. High Rise Construction Company want to buy a new cement pumping machine to invest from labor costs. Cement pump is 1.000.000-TL and its life time is 10 years. (Salvage value=0) Pump is depreciated with normal depreciation method according to lifetime. Cement pump will decrease labor cost 12.000-TL per month. (144.000-TL per year) Evaluate this project by using 4 methods of capital budgeting model. Income Tax rate 20%. Discount rate= last digit of your student number. (if O use "10%") Example: If your student number is 18063846; LAST Digit is 6. So your discount rate is 6%. Evaluate if company should buy this cement pump or not with each method? (20 points) Show your calculations and make logical explanations about your decisions. 7- Businesses spend large amount of money on assets. To give decision where to spend money they evaluate different business investments. For evaluation they use capital budgeting models. High Rise Construction Company want to buy a new cement pumping machine to invest from labor costs. Cement pump is 1.000.000-TL and its life time is 10 years. (Salvage value=0) Pump is depreciated with normal depreciation method according to lifetime. Cement pump will decrease labor cost 12.000-TL per month. (144.000-TL per year) Evaluate this project by using 4 methods of capital budgeting model. Income Tax rate 20%. Discount rate= last digit of your student number. (if O use "10%") Example: If your student number is 18063846; LAST Digit is 6. So your discount rate is 6%. Evaluate if company should buy this cement pump or not with each method? (20 points) Show your calculations and make logical explanations about your decisionsStep by Step Solution
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