Question: QUESTION 2 A company is considering whether to purchase a new machine. Machines A and B are available for R80,000 each. Earnings after taxation are

QUESTION 2 A company is considering whether to purchase a new machine. Machines A and B are available for R80,000 each. Earnings after taxation are as follows: Year Machine A (R) Machine B (R) 1 24,000 8,000 2 32,000 24,000 3 40,000 32,000 4 24,000 48,000 5 16,000 32,000 Required: Evaluate the two alternatives using a discount rate of 10% by calculating the following Net Present Value for both machines, using

a) Manual calculations

b) The Excel function.

c) Based on your calculations, What would your recommendation to the company be?

d) Marks will be given for formatting

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