Laxmi Ltd. is considering a proposal to buy one of the two machines. Each machine requires investment of ? 34,375 and has useful life of 12 years. Estimates associated with these two machines are as follows:(A) The company will select Machine X as its NP V is high in optimistic scenario(B) The company will select Machine Y as its NPV is high in optimistic scenario(C) Purchasing Machine Y will be more risky as NPV is negative as high as ? 7,523 while if Machine X is purchased, the NPV can be negative only ? 2,980.(D) Purchasing Machine Y will be more risky as NPV is negative as high as ? 28,954 while if Machine X is purchased, the NPV can be negative only ? 4,560.

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Machine X Machine Y CFAT: Pessimistic 5,500 Most likely 8,250 Optimistic 11,000 1,000 6,875 13,750 Machine X Machine Y CFAT: Pessimistic 5,500 Most likely 8,250 Optimistic 11,000 1,000 6,875 13,750

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Answer D Purchasing ... View the full answer