9000 46000 FastBits Electronic Company Sdn. Bhd. is evaluating new precision inspection devices to help verify package quality. The manager has obtained the following bids from four companies. All devices have a life of five years and a minimum attractive rate of return of 6%. The alternatives are mutually exclusive. Description Company A Company B Company C Company D Initial Cost (RM) 360000 112000 530000 200000 Annual Costs (RM) 900 12000 23000 Net Cash Flows (RM) 90000 31360 132500 IRR 7.9% 12.4% 7.9% 4.8% Determine the annual benefits of the devices from all four companies. Company A: Format : 80600 Company B: Format : 89450 Company C: Format : 483200 Company D: Format : 79000 Device from which company has the highest annual benefit? Format: A FastBits should reject the bid from which company based on the given individual IRR? Format: A Using incremental internal rate of return analysis, from which company, if any, should the manager purchase the new precision inspection device? Use trial and error method with 6% and 12% interest rates. Understood? (Y/N) Format : A Step 1- Eliminate Company Format : A Step 2 - Rank Company from no 1-2-3 Format : X-X-X Step 4 - Incremental IRR first comparison Format : 9.8 Step 5 - Remove Company from selection Format : A Repeat Step 4 - Incremental IRR 2nd comparison Format : 8.4 Step 5 - Choose Company Format : A Demonstrate that the same company selection would be made with proper application of the Present Worth (PW) method. PW Company A Format : 33695 PW Company B Format : 40306 PW Company C Format: 78362 PW Company D Format : -2530 Thus, choose Company Format : A Submit