A company is planning to undertake an investment project. The following data have been calculated...
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A company is planning to undertake an investment project. The following data have been calculated for two alternatives A and B: Data Alternative A Alternative B 8 8 Economic life (years) Sales value (unit per year) 20,000 24,000 8 8 2240,000 28,000 2,000 Sales price ( per unit) Initial investment outlay 200,000 Construction costs 18,000 Freight costs 2,000 Liquidation value at the end of period 6,000 Variable unit cost 4.6 Rate of interest (%per year) 6 22,000 4.4 16 (a) The profit comparison method (b) The average rate of return method (c) The static payback method
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