question archive Aman Bina Sn Bhd is planning to increase their work progress by upgrading the machinery to higher capacity processor with initial cost of RM 90,000, operation and maintenance cost RM 7,000 per year, life cycle ten (10) years, salvage value of RM 10,000
Aman Bina Sn Bhd is planning to increase their work progress by upgrading the machinery to higher capacity processor with initial cost of RM 90,000, operation and maintenance cost RM 7,000 per year, life cycle ten (10) years, salvage value of RM 10,000
Subject:FinancePrice:2.86 Bought7
Aman Bina Sn Bhd is planning to increase their work progress by upgrading the machinery to higher capacity processor with initial cost of RM 90,000, operation and maintenance cost RM 7,000 per year, life cycle ten (10) years, salvage value of RM 10,000. Hence increase in production that will generate an income of RM 30,000 per year. Evaluate the investment based on future worth (FW) method with an expected MARR of 12%per year using a proper cash flow diagram. (13 marks)
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
ANSWER
NPV (FUTURE WORTH ) = 43,174.86
| CASH FLOWS | INTITAL COST | OPERATION AND MAINTAINANCE COST | SALVAGE | CASH INFLOWS | NET CASHFLOWS | PV FACTOR @10% | PV OF CASH FLOWS |
| YEAR 0 | -90000 | -90000 | -90000 | ||||
| YEAR 1 | -7000 | 30000 | 23000 | 0.893 | 20535.71 | ||
| YEAR 2 | -7000 | 30000 | 23000 | 0.797 | 18335.46 | ||
| YEAR 3 | -7000 | 30000 | 23000 | 0.712 | 16370.95 | ||
| YEAR 4 | -7000 | 30000 | 23000 | 0.636 | 14616.92 | ||
| YEAR 5 | -7000 | 30000 | 23000 | 0.567 | 13050.82 | ||
| YEAR 6 | -7000 | 30000 | 23000 | 0.507 | 11652.52 | ||
| YEAR 7 | -7000 | 30000 | 23000 | 0.452 | 10404.03 | ||
| YEAR 8 | -7000 | 30000 | 23000 | 0.404 | 9289.31 | ||
| YEAR 9 | -7000 | 30000 | 23000 | 0.361 | 8294.03 | ||
| YEAR 10 | -7000 | 10000 | 30000 | 33000 | 0.322 | 10625.12 | |
| MARR | 12% | NPV = | 43174.86 |
