3.3 The management of Crookie Ngong Tele Sdn. Bhd. is in the process of replacing the current Metal Stamping Press machine with a new one. Two (2) brand-new press machines, Press A and Press B are available for the final evaluating process. The quotation on the machines and expected operating costs with their market values at the end of each press machine are summarized in Table 3.1. Table 3.1: Detailed information on the brand-new Press Machines UTM Item UTM Press Machine A Press Machine B Initial first cost RM 550,000 Annual operating costs RM 5,000 RM 750,000 RM 2,000 in first 6UTM year then increased UTM linearly by RM 500 per year from the second year onwards RM 5,000 10 UTM Market value at end of life RM 3,000 Useful life, n (year) (10 marks) Analyze the above data and determine which brand of press machine would you recommend to the management? Use Annual Worth method to compare the brand of each press. Assume that the MARR is 26.5% per year. Show all the calculations. UTM OUTM UTM UTM UTM QUESTION 3 (20 MARKS) OUTM 3.1 The estimated transaction cashflows of a project is summarized as follows: Expenditure ROWS UTM Initial investment now: RM 100,000 UTM Annual income of RM 40,000 starting year two (2) until year four (4). Income (4 marks) With the aid of cash flow diagrams, determine the Rate of Investment (ROI) of the above UTM project. UTM UTM 6UTM UTM 3.2 Figure 3.1 shows a cash flow diagram for an engineering project. The project has an initial investment of RM 120,000 and expenditure of RM 10,000 every six months for three (3) years. A2 RM?/ 3 months 36 months. 1'5 12 6 A = RM 10,000/6 months UTM 3.1sment UTM UTM M UTM BUTM i=12% per year compounded every three months Figure 3.1: Cash flow of an engineering project RM 120,000 OUT (6 marks) OUTM OUTM You have been asked to determine the minimum income required for every three (3) months starting from the first quarter of year two (2) until at the end of year three (3) to cover all the project expenses. OUTM BUT ONE OUTN UTM OUTM