a)
To determine:
NPV, acceptability of the purchase of equipment.
Introduction:
The difference between the present value of cash inflows and the present value of
b)
To determine:
The highest cost of capital that the firm can have to have a positive NPV.
Introduction:
The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyse the profitability of projects.
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