Turners Ltd is considering the purchase of a new machine that is expected to save labour on

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Turners Ltd is considering the purchase of a new machine that is expected to save labour on an existing project. The estimated data for the two machines available on the market are as follows:

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Which will be selected under the following criteria?

(a) NPV, assuming a cost of finance of 10 per cent p.a.

(b) IRR

(c) ARR

(d) PBP.
Ignore taxation throughout and treat the savings as if they will occur at the end of the relevant year.

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Business Finance

ISBN: 9781292134406

11th Edition

Authors: Eddie McLaney

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