Answer Happy

Posted: **Sat Jul 02, 2022 10:21 pm**

: Idisign Incorporation Is Considering The Purchase Of A New Packaging Machine To Have A More Creative And Innovative Pack 1 (37.42 KiB) Viewed 12 times

: Idisign Incorporation Is Considering The Purchase Of A New Packaging Machine To Have A More Creative And Innovative Pack 2 (32.28 KiB) Viewed 12 times

: Idisign Incorporation Is Considering The Purchase Of A New Packaging Machine To Have A More Creative And Innovative Pack 3 (29.77 KiB) Viewed 12 times

IDISIGN incorporation is considering the purchase of a new packaging machine to have a more creative and innovative packaging design The manager think that an innovative packaging design will have a positive impact on sales and the purchasing experience for the customer. -The initial outlay of the machine is 12,500,000 -Each year the operation inflows are equal to AED 5,000,000 -During the third year the equipment will require maintenance with the cost of 1,000,000 -The required rate of return on this project is 10 percent. -One of the objectives is to cover the initial outlay in 3 years. Based on the above information, 1.Calculate the annual net cash flow. 1 Mark Year 0 1 2 3 4 5 Cash Flows

C. Net present value (NPV) 2 marks Steps Values Result Justify your final decision d. Internal rate of return (IRR) 2 marks Steps Values

e. Profitability Index (PI) 1 mark Formula: Calculation: Result and decision