Calculate the Payback Period (PBP) for Machine B assuming cash flows are received evenly throughout the year. Calculate the NPV for Machine B if the cost of capital is 6.8% pa and assuming cash flows are received at the end of each year Explain which machine you would recommend based on all of the information. Need help answering all please!
A company is considering two alternative investments in a machine as part of a workshop upgrade. Partial results of some financial analysis are as follows:
ARR Payback Period
Machine A 25% 2.9 years $10,666 21%
Machine B 33.3% 27%
Machine B will cost $20,000 and have estimated annual incremental
- Calculate the Payback Period (PBP) for Machine B assuming cash flows are received evenly throughout the year.
- Calculate the NPV for Machine B if the cost of capital is 6.8% pa and assuming cash flows are received at the end of each year
- Explain which machine you would recommend based on all of the information.
Need help answering all please!
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