The Horne Robinson Inc. has the following investment opportunities. Assume the discount rate the firm uses is 10%:

i. Under the payback period and assuming these machines are mutually exclusive, which machine(s) would Horne Robinson Inc. choose? 

ii. Under NPV evaluation and assuming these machines are mutually exclusive, which machine(s) would Horne Robinson Inc. choose? 

iii. Under IRR evaluation and assuming these machines are mutually exclusive, which machine(s) would Horne Robinson Inc. choose?

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Year 1 Year 2 Year 3 Year 4 Year 5 Machine A ($20,000) Inflows S10,000 10,000 5,000 2,000 Machine B ($30,000) Inflows $12,000 12,000 10,500 10,500 Machine C (S40,000) Inflows so 10,000 30,000 15,000 15,000 Year 1 Year 2 Year 3 Year 4 Year 5 Machine A ($20,000) Inflows S10,000 10,000 5,000 2,000 Machine B ($30,000) Inflows $12,000 12,000 10,500 10,500 Machine C (S40,000) Inflows so 10,000 30,000 15,000 15,000

Answer rating: 100% (QA)

Here take Discounted Payback Consider MachineATotal The outflow is 20000 so in PV Present Value of f... View the full answer