A machine belong to Olorunsogo Plc. is available for purchase at the cost NGN80000, and it has an expected life of 5 years with a scrap value of NGN10000 at the end of the five year period. Estimate of additional profits before depreciation over the asset are as follows:
Year
1
2
3
4
5

Amount (NGN)
20000
40000
30000
15000
5000


The company cost of capital is 9%
You are required to advise the firm if they should embark on the project.

Answer rating: 100% (QA)

Solution Use learning curve formula Y axb Where Y cumulative average ... View the full answer