Question: Panayiotis the owner and manager of Micos Ltd is evaluating

Panayiotis, the owner and manager of Micos Ltd., is evaluating the acquisition of new equipment needed to attend a new line of business. He has two alternatives: either buy two small machines or one large and more automatic machine:
1. Determine the payback period in years.
2. Determine the present value of total recurring cash flows.
3. Determine the net present value of the project.
4. Do you estimate that the IRR of the project is higher or lower than 5%?
5. If both projects were independent, would you accept them?

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  • CreatedJuly 31, 2015
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