Quizzes & Puzzles3 mins ago
Net present value
Where a company wins a new contract it has to decide wether to keep the old equipment or to replace it with new. the new equipment will acheive savings for the period of the contract. this question includes tax rates, depreciation working capital and inflation. The business has an annual rate of return of 10% after tax. The question is should the company persist with the old machinery or purchase the new equipment. can anyone point me in the right direction of a worked example of something like this?
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