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A company is planning to make some investment to remain competitive. Hence, Senang Hidup Bhd. is considering investing in a new fully auto machinery which
A company is planning to make some investment to remain competitive. Hence, Senang Hidup Bhd. is considering investing in a new fully auto machinery which would cost RM2.05 million to buy and install. Meanwhile, some equipment that supports the old manual system can be scrapped upfront and generate net proceeds of RM50,000. However, the new auto machine requires a minimum trial run period of one year. During the first year of the trial run, the company needs to spend an implementation fee of RM750,000. Operating profit to be derived from the new automatic machine is forecast to be RM0.5 million at the end of second year, RM1 million at the end of third year, RM1.5 million in the
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