QUESTION 2 INFORMATION: vista Limited intends purchasing a new machine and has achoice setween the following two machines Equipment A Equipment Initial cost R220 000 R240 000 Eyears Expected usetul ie Srap value Expected net cuh infows years Nil End of 35 000 70 000 Year 1 Year 2 60 000 70 000 Year 3 Year4 62000 70 000 60 000 70 000 Year3 70 000 70 000 The company estimates that its cest of capital is 12 Required: 21 Calculate the Payoeck Period of both equipment. (Answers must be expressed in years, months and days 22 Calcuiate the Accounting Rate of Return (on initial investment) for both equipment A and 8. (Answers must De expressed to 2 decimal piaces) 23 Caiculate the Net Present value of each equipment. (Round oft amounts to the nearest Rand ) 24 Calculate the intemai Rate of Return of Equipment .
QUESTION 2 INFORMATION: vista Limited intends purchasing a new machine and has achoice setween the following two machines Equipment A Equipment Initial cost R220 000 R240 000 Eyears Expected usetul ie Srap value Expected net cuh infows years Nil End of 35 000 70 000 Year 1 Year 2 60 000 70 000 Year 3 Year4 62000 70 000 60 000 70 000 Year3 70 000 70 000 The company estimates that its cest of capital is 12 Required: 21 Calculate the Payoeck Period of both equipment. (Answers must be expressed in years, months and days 22 Calcuiate the Accounting Rate of Return (on initial investment) for both equipment A and 8. (Answers must De expressed to 2 decimal piaces) 23 Caiculate the Net Present value of each equipment. (Round oft amounts to the nearest Rand ) 24 Calculate the intemai Rate of Return of Equipment .
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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