Calculate present values and advice management accordingly

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Kigosho Ltd is considering to purchase a new machine. They are opting for two alternative machines X at a cost of sh.70000 and Z at cost of sh.60000.The cash flows after tax are as follows:

Year                   X                      Y

1                 18000            60000

2                 24000           18000

3                 30000           20000

4                  18000         30000

5                   16000         24000

Cost of capital is 12%

Required:

Problem 1: Calculate the present values. Advice management accordingly.

Reference no: EM132616354

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