Hephzibah Limited is just about to buy a new textile machine for GHS100,000. Although its maximum...
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Hephzibah Limited is just about to buy a new textile machine for GHS100,000. Although its maximum working life will be only five years such a machine features in the company's long-term plans, and is expected to produce a constant (year-end) for this machine have been estimated to be as follows. Year 0 1 2 3 4 GHS GHS GHS GHS GHS GHS Initial outlay 100,000 Operational costs 17,000 20,000 23,000 26.000 30,000 Maintenance 3,000 5.000 7,000 9.000 10,000 Scrap value 60,000 45.000 30,000 20.000 10,000 Required Calculate the optimum time for the replacement of the textile machine, assuming the costs of capital to be 8 percent. Hephzibah Limited is just about to buy a new textile machine for GHS100,000. Although its maximum working life will be only five years such a machine features in the company's long-term plans, and is expected to produce a constant (year-end) for this machine have been estimated to be as follows. Year 0 1 2 3 4 GHS GHS GHS GHS GHS GHS Initial outlay 100,000 Operational costs 17,000 20,000 23,000 26.000 30,000 Maintenance 3,000 5.000 7,000 9.000 10,000 Scrap value 60,000 45.000 30,000 20.000 10,000 Required Calculate the optimum time for the replacement of the textile machine, assuming the costs of capital to be 8 percent.
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Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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