Give your assessment of the relative costs of Type I and Type II errors in the following situations where a decision is pending: a. A new synthetic feed additive is….
Company LDC is contemplating on acquiring new machine replace the old one.
Company LDC is contemplating on acquiring new machine replace the old one. Year 0 is when the new machine will be acquired and the old one disposed. This new machine will operate for 4 years. As the CPA-CMA (istikoy) of the company you are asked by the management for advise on whether to go on with the proposed acquisition. The data attached were given to you for your consideration.
You must support your recommendations with appropriate calculations of the Initial Investment Cost (itemized), Present Value of Cash Flows (itemized yearly), Net Present Value, Internal Rate of Return, and Profitability Index.
Your recommendation and supporting calculations must be in excel format. Other than the IRR, you are not allowed to use “EXCEL FUNCTION”. You may use however excel functions to validate your answer.