The cost except depreciation and interest rate cost

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Telecom Namibia is considering the purchase of a machine at the of cost 100 thousand dollars, and which has a lifespan of only two years, after which it has a zero scrap vale. This investment, if undertaken, will generate gross return of 53 thousand dollars and 84 thousand dollars at the end of the first year and second year, respectively, after deducting all the cost except depreciation and interest rate cost. Should Telecom Namibia go ahead with this investment when the prevailing rate of interest is 18 percent? Explain.

Reference no: EM131104321

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