Decide on replacement decision of current manually operated

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Reference no: EM13766916

Zain corporation ltd is trying to decide on replacement decision of its current manually operated machine with a fully automatic version. The existing machine was purchased ten years ago. It has a book value of $ 140000 and remaining life of 10 years salvage value $40000. on their total assets of value USD 25 lacs. The company is in tax bracket of 35% & capitalization rate of 15% on all equity shares.

You are required to compute the value of both the firms using Net Income approach.

Reference no: EM13766916

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