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DK Enterprises Ltd is considering investment on a CNC system for its painting department. After...

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Accounting

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DK Enterprises Ltd is considering investment on a CNC system for its painting department. After a bidding exercise, the company is considering one of two options as follows: Selection Criteria Option A (Costs) Option B (Costs) 26000 40000 4000 6000 1000 1200 Purchase price Labour cost per year Floor space per year Energy consumption per year Maintenance cost per year Salvage value (after machine life time) 2000 1800 5000 1000 4000 14000 Assuming that machine A and B have a life time of 3 years and 14% Return on Investment is achievable, use the NPV method to work out the best option for DK Enterprise Ltd

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