You are working with Dewina Food Industries Private Limited as Junior Analyst. Your company is famously...
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You are working with Dewina Food Industries Private Limited as Junior Analyst. Your company is famously known for its brand name Brahim's and is a producer of premium quality instant retort pouched foods in Southeast Asia. You are working at their manufacturing plant located in Selangor. Your manager is considering to purchase new packaging machine and shortlisted these four machines from two different suppliers. Your manager had projected the followings cash flows and discount rates. Your company standard payback period is maximum 4 years. Assume there's no limitation / restriction on the purchase. Year 0 1 2 3 4 5 6 Discount rate Machine 123- Machine 123-A Machine 789- Machine 789-A M (RM) M (RM) (RM) (RM) -280,000 72,000 72,000 72,000 72,000 72,000 (330,000) 82,500 82,500 82,500 82,500 82,500 82,500 10% (668,500) 52,000 78,000 117,000 175,500 263,250 394,875 10% 7.5% -550,000 120,000 120,000 120,000 120,000 120,000 7.5% You are required to provide analysis in regards with these machines. Based on the above information, construct a spreadsheet in Excel. In your analysis, including the following: d) Calculation of Profitability Index. e) Based on the above results, a) [12 marks] decisions. ») Calculation of Payback Period. [8 marks] b) Calculation of Net Present Value. [8 marks] c) Calculation of Internal Rate of Return. [2 marks] [4 marks] d), explain your which The company budgeted RM1 million for this investment. Advise your manager, machine(s) should the company buy and reject? Why? How much is the total initial cost? 15 marks] From the previous question f), how would you decision change, if there's no capital limitation? State your decision and reasons. Rank your preferred machine(s). [4 marks] h) Assume this is mutually exclusive project, state your decision and reason. [2 marks] You are working with Dewina Food Industries Private Limited as Junior Analyst. Your company is famously known for its brand name Brahim's and is a producer of premium quality instant retort pouched foods in Southeast Asia. You are working at their manufacturing plant located in Selangor. Your manager is considering to purchase new packaging machine and shortlisted these four machines from two different suppliers. Your manager had projected the followings cash flows and discount rates. Your company standard payback period is maximum 4 years. Assume there's no limitation / restriction on the purchase. Year 0 1 2 3 4 5 6 Discount rate Machine 123- Machine 123-A Machine 789- Machine 789-A M (RM) M (RM) (RM) (RM) -280,000 72,000 72,000 72,000 72,000 72,000 (330,000) 82,500 82,500 82,500 82,500 82,500 82,500 10% (668,500) 52,000 78,000 117,000 175,500 263,250 394,875 10% 7.5% -550,000 120,000 120,000 120,000 120,000 120,000 7.5% You are required to provide analysis in regards with these machines. Based on the above information, construct a spreadsheet in Excel. In your analysis, including the following: d) Calculation of Profitability Index. e) Based on the above results, a) [12 marks] decisions. ») Calculation of Payback Period. [8 marks] b) Calculation of Net Present Value. [8 marks] c) Calculation of Internal Rate of Return. [2 marks] [4 marks] d), explain your which The company budgeted RM1 million for this investment. Advise your manager, machine(s) should the company buy and reject? Why? How much is the total initial cost? 15 marks] From the previous question f), how would you decision change, if there's no capital limitation? State your decision and reasons. Rank your preferred machine(s). [4 marks] h) Assume this is mutually exclusive project, state your decision and reason. [2 marks]
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Answer rating: 100% (QA)
a Payback Period The rationale for the payback period is to estimate the time that a project will take to generate cash inflows that are equivalent to the cash It estimates the amount of time it takes ... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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