Tibim Limited must decide whether to purchase a piece of factory equipment for KShs 300,000. The...

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Tibim Limited must decide whether to purchase a piece of factory equipment for KShs 300,000. The equipment would only last three years, but it is expected to generate KShs.150, 000 of additional annual profit during those years. Tibim Limited also thinks it can sell the equipment for scrap afterward for about KShs. 10,000. Using IRR, Tibim Limited can determine whether the equipment purchase is a better use of its cash than its other investment options, which should return about 10%. Should the company purchase the equipment? (5 Marks) Tibim Limited must decide whether to purchase a piece of factory equipment for KShs 300,000. The equipment would only last three years, but it is expected to generate KShs.150, 000 of additional annual profit during those years. Tibim Limited also thinks it can sell the equipment for scrap afterward for about KShs. 10,000. Using IRR, Tibim Limited can determine whether the equipment purchase is a better use of its cash than its other investment options, which should return about 10%. Should the company purchase the equipment? (5 Marks)

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