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e Expert Question Question 3 (20 marks) Namibia Trading Limited ("NTL") has the choice of purchasing one of two machines namely, Machine A and Machine B. Both machines have five year useful life, with only Machine A having a residual value of N$300 000. The annual volume of production for both machines is estimated at 200 000 units, which can be sold at N$20 per unit. Depreciation is calculated on the machines using the straight line method (cost method). Machine A costs NS4 800 000 excluding installation cost of N$300 000. The annual operating costs are estimated at NS380 000 (excluding depreciation). A major overhaul at a cost of N$200 000 is expected to be undertaken at the end of year three. Fixed costs are estimated at N$2 100 000 (excluding depreciation). Machine B costs NS5 100 000 including installation cost of N$400 000. The annual operating costs are estimated at N$330 000 (excluding depreciation). Fixed costs are the same as Machine A. The weighted average cost of capital is 14%. Marks Show full question This question hasn't been answered yet.