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Your company is considering a new machine purchase which costs 7.5M. It is expected that this investment would provide savings of 1.5M per annum. The
Your company is considering a new machine purchase which costs 7.5M. It is expected that this investment would provide savings of 1.5M per annum. The discount rate is 12% per annum but is expected to increase to 15% from year 3. What is your recommendation regarding this investment? Provide calculations to justify your recommendation.
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