Compute the payback period of the machine

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Reference no: EM132875241

Problem - Jalur Bhd is considering purchasing a machine that would cost RM403,200 and has useful life of 9 years. The machine would reduce cash operating costs by RM74,667 per year. The machine would have a salvage value of RM60,480 at the end of the project. Ignore taxation in this problem.

Required -

i) Compute the payback period of the machine.

ii) Compute the simple rate of return of the machine.

iii) Disc0uss TWO (2) reasons why depreciation is not deducted in computing the present value of a project.

Reference no: EM132875241

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