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Discussion post #$1..$Consider the following capital budgeting problem. The following two machines, A & B$,$ are mutually exclusive. The cash fows associated with each machine are tabulated as follows; all numbers are in thousand dollars; the relevant discount rate is $10\%$ for both machines.

Year Machine A Machine B

$0($$$80,000)($$$100,000)$

$150,00060,000$

$250,00060,000$

$350,00060,000$

$450,00060,000$

a$)$ Calculate the net present value for each machine investment, assuming a $10\%$ rate of return.

b$)$ Calculate the accounting rate of return for each machine investment.

c$)$ Calculate the internal rate of return for each machine investment.

d$)$ Calculate the payback period for each machine investment.

e$)$ which one would you recommend the company to purchase?

Discussion post #$2..$Natural Lotion is considering the purchase of a new packaging machine. The machine costs $

$1$

$5$

$0$

$,$

$0$

$0$

$0$

$,$

$$and has a

$1$

$0$

$-$

year life. The company uses the straight

$-$

line depreciation method, and the machine has no residual value. The machine will produce net cash inflows of $

$3$

$7$

$,$

$0$

$0$

$0$

$$per year at the end of each year. For purposes of responding to each requirement below, you may assume no income taxes. a

$)$

$$Calculate the net present value of the machine investment, assuming a

$1$

$2$

$\%$

$$rate of return. b

$)$

$$Calculate the accounting rate of return for the machine investment. c

$)$

$$Calculate the internal rate of return for the machine investment. d

$)$

$$Calculate the payback period for the machine investment.

ANSWER THIS QUESTION ONLY$>>$ Give a summary on both Discussion post's on what you learned $?$

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