(a)[4]
Distinguish how the payback method of investment appraisal differs from the net present value method.
(b)[1]
Calculate the estimated net present value for the replacement machine.
(c(i))[5]
Calculate the net cash flow in each of years 1 to 5 for the replacement machine.
(c(ii))[2]
Calculate how long the replacement machine takes to pay back.
(c(iii))[8]
Calculate how many units Wong Ho expects the replacement machine to produce in each year.
(d)[5]
Recommend whether Wong Ho should buy the replacement machine, and justify your decision.