A Company Is Evaluating an Investment in a Piece of Machinery.The

question 13

Multiple Choice

A company is evaluating an investment in a piece of machinery.The machine costs £10,000 and is expected to generate cash flows of £3,000 in year 1,£4,300 in year 2 and £5,800 in year 3.The discount rate is 10% and the relevant discount factors are:
$$\begin{array} { c c } \text { Year 1 } & 0.909 \\\text { Year 2 } & 0.826 \\\text { Year 3 } & 0.751\end{array}$$
Calculate the NPV

• A) £13,100
• B) £10,634.60
• C) £634.60
• D) £0

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Definitions:

Labour Courts

Specialized tribunals or courts that deal with disputes between employers and employees or unions, often focusing on labor law and workers’ rights.

Employment Conditions

The terms and aspects under which employees work, including hours, pay, benefits, and work environment.

Australia

A continent and sovereign country located in the Southern Hemisphere, known for its diverse ecosystems, unique wildlife, and as a major economic power in the Asia-Pacific region.

Appraising Performance

The systematic evaluation of an employee's job performance and productivity in relation to established criteria and objectives.