(a)[5]
Calculate the accounting rate of return (ARR) for Machine A.
(b)[3]
Calculate the payback period for Machine A.
(c)[4]
State two advantages and two disadvantages of the payback method when appraising investment.
(d)[3]
Calculate the net present value (NPV) for Machine A.
(e)[5]
Calculate the internal rate of return (IRR) for Machine A.
(f)[5]
Advise the directors of T Limited on which machine to buy. Justify your answer.