Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000

Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.1.1MBA

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