(a)[5]
Calculate the accounting rate of return (ARR) for Machine X.
(b)[4]
State two benefits and two drawbacks of using ARR.
(c)[5]
Calculate the net present value (NPV) for Machine X.
(d)[3]
Calculate the IRR for Machine X.
(e)[5]
Advise the directors of P Limited on which machine they should choose. Justify your answer.
(f)[3]
Calculate the annual receipts that give a zero NPV for Machine Z.