SUC Berhad is considering two mutually exclusive pieces of machinery that perform the same task....
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SUC Berhad is considering two mutually exclusive pieces of machinery that perform the same task. The two alternatives available provide the above set of after-tax net cash flows.
Machine A has an expected life of three years, whereas machine B has an expected life of nine years. Assume a required rate of return of 15 percent. You are required to compare the projects by using following methods.
Question 3(a) Calculate the Payback Period for Machine A and B. Question 3(b) Calculate the Net Present Value for Machine A and B. (6 Points) Question 3(c) Calculate Internal Rate of Return (IRR) for Machine A and B. Question 3(d) Calculate the Equivalent Annual Annuity (EAA) for Machine A and B Question 3(e) Which project should be selected?
Machine A (RM20,000) RM12,590 RM12,590 RM12,590 CO ci C2 C3 C4 CS C6 C7 C8 C9 Machine B (RM20,000) RM 6,625 RM 6,625 RM 6,625 RM 6,625 RM 6,625 RM 6,625 RM 6,625 RM 6,625 RM 6.625
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