(a)[2]
Explain how a project could pay back during the life of the project while still having a negative NPV.
(b)[5]
Complete the table below to work out the cost changes that would arise if servicing were reduced.
(c)[5]
Calculate the NPV that the machine purchase would yield if servicing was reduced.
(d)[5]
Advise the directors whether or not they should purchase the machine if it were run with the lower servicing level. Support your answer.
(e)[4]
Calculate the sales proceeds at which NPV would be zero.
(f)[4]
Explain how a business would determine its internal rate of return (IRR).