Question 1
Year
Reve
nues
Materi
al and
Labour
Other
cash
expen
ses
Depre
ciation
Net
Profit Tax
NP
AT
De
pre
ciat
ion
PA
T
DC
F
@
12
% PV
1
$
120,0
00.00
$
68,000
.00
$
14,000
.00
$
10,000
.00
$
28,00
0.00
$
11,2
00.0
0
$
16,
80
0.0
0
$
10,
000
.00
$
26,
80
0.0
0
0.
89
3
$
23,
92
8.5
7
2
$
120,0
00.00
$
68,000
.00
$
14,000
.00
$
10,000
.00
$
28,00
0.00
$
11,2
00.0
0
$
16,
80
0.0
0
$
10,
000
.00
$
26,
80
0.0
0
0.
79
7
$
21,
36
4.8
0
3
$
120,0
00.00
$
68,000
.00
$
14,000
.00
$
10,000
.00
$
28,00
0.00
$
11,2
00.0
0
$
16,
80
0.0
0
$
10,
000
.00
$
26,
80
0.0
0
0.
71
2
$
19,
07
5.7
1
4
$
120,0
00.00
$
68,000
.00
$
14,000
.00
$
10,000
.00
$
28,00
0.00
$
11,2
00.0
0
$
16,
80
0.0
0
$
10,
000
.00
$
26,
80
0.0
0
0.
63
6
$
17,
03
1.8
8
5
$
120,0
00.00
$
68,000
.00
$
14,000
.00
$
10,000
.00
$
28,00
0.00
$
11,2
00.0
0
$
16,
80
0.0
0
$
10,
000
.00
$
26,
80
0.0
0
0.
56
7
$
15,
20
7.0
4
Initial Investment 0 Year
-$
50,000.00
Present Value of Cash
Inflows 1-5th Year
$
96,608.00
Present value Terminal
Cash Flow 5th Year
$
340.46
NPV
$
46,948.46
The company should purchase the saw as it will give the benefit to the company
in terms of positive net cash flow
Question 2
Selling Price per unit
$
100.00
Variable cost per unit $

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