(a) An asset which has a first cost of RM 40,000 is expected to have an annual operating cost of RM 15,000 per year. It will provide the needed service for a maximum of 6 years. If the salvage value changes as shown below, determine the coonomic life of the asset at 20% per year. Table Q3(a) (10 marks) 3 CONFIDENTIAL ONFIDENTIAL BDA40902 (b) A furniture company intends to evaluate whether they want to stick with the existing equipment (defender) or replace them with the new productive equipment (challenger). The details of the cost required are shown in Table Q3(b) below. Use an interest rate of 20% per year. Table Q3(b) (i) Use the replacement analysis to justify whether the existing equipment is required to be replaced with the new equipment. (10 marks) (ii) If the existing equipment (defender) could be sold in international market, determine how much is the minimum value of the defender so that the challenger could replace the defender now? (5 marks) (a) An asset which has a first cost of RM 40,000 is expected to have an annual operating cost of RM 15,000 per year. It will provide the needed service for a maximum of 6 years. If the salvage value changes as shown below, determine the coonomic life of the asset at 20% per year. Table Q3(a) (10 marks) 3 CONFIDENTIAL ONFIDENTIAL BDA40902 (b) A furniture company intends to evaluate whether they want to stick with the existing equipment (defender) or replace them with the new productive equipment (challenger). The details of the cost required are shown in Table Q3(b) below. Use an interest rate of 20% per year. Table Q3(b) (i) Use the replacement analysis to justify whether the existing equipment is required to be replaced with the new equipment. (10 marks) (ii) If the existing equipment (defender) could be sold in international market, determine how much is the minimum value of the defender so that the challenger could replace the defender now