Question: Brigham Ltd is considering purchasing a machine to replace an old one. The price of the new machine is R900 000. The cost to transport
Brigham Ltd is considering purchasing a machine to replace an old one. The price of the new machine is R900 000. The cost to transport the machine to the factory is R110 000, and the installation cost is R90 000. The purchase of the new machine will result in an increase in net working capital of R250 000. The old machine was purchased 3 years ago at a cost of R500 000. The old equipment is depreciated on a straight-line basis over a period of 5 years. In addition, the old machine required an increase in net working capital of R120 000. Suppose the old machine is sold after 3 years for R350 000, and the removal cost of the
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