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8-18 А QZY, Inc. is evaluating new widget machine offered by three companies. The chosen machi will be used for 3 years. Comp

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Answer #1

Incremental RoR = Average Annual Inflow after tax and depreciation/average investment

Future worth analysis could be done by calculating NPV of different companies.

Whereas NPV is the difference of PV of all cash inflows and Outflows

Pay Back Period = Initial Investment/Net Annual Cash Inflows

Benefit Cost ratio = Aggregate of PV of all cash inflows/Aggregate of PV of all cash Outflows

Co. Coc 15990 25 000 20 con Solution Initial Investment First cost & Add Maintenance & operating cost Total Tnitial Outtay($)Incrementa Rok= Aneage Annual Intoro afre too cool. Average Investment Average Investment = £ (Initial rement & Saluate tonertet (3) Benefit Cost Ratio Pay Back Period Analyn: - Initial Investment Net Annual Cash Inflow for Company A = 15000 buco = 25. first cost of company B changes to $ 35000 Then Initial Investment. $35000 Anmal Benefit: 13000 for Company B lex: Maintai

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