A semiconductor company, Fristale Sdn Bhd will upgrade its Wafer Bonding Unit to increase the productivity of 12-inch high quality silicon wafer with a minimum return rate (MARR) of 12% (Note: A is a last digit of your matric number, example: Klx180015, A=5). To this end, Fristale Sdn Bhd is studying 3 existing Wafer Bonder machines whether they need to be maintained or replaced with new ones. If the analysis determines that Fristale Sdn Bhd will need to replace the existing wafer bonder machines to the new one, the disposal of the existing machines will have to be done and the company will likely be gain or loss. An existing Wafer Bonder machine is purchased at Base price of RM 120K. This machine can still be used for 7 years and has a very high current market value of RM70K. By the end of the seventh year, the machine could still be sold for at least RM25K (salvage value) even though its market value had shrunk to zero. The operating and maintenance expenses for this existing machine are RM45K per annum. A new Wafer Bonder machine with the same level of performance can be purchased at a base price of RM130K. The new machine has a market value of RM20K by the end of the seventh year with operating and maintenance expenses of RM30K per annum. As an economic consultant to Fristale Sdn Bhd, you are responsible for analyzing the 7 years study period of the following situations; A. As one of the key steps in monitoring its company's cash flow situation, Fristale Sdn Bhd needs to take into account the depreciation value of their assets. Conduct a study to find out the cumulative depreciation of an existing 'Wafer Bonder' machine and investigate the reduction value of an asset in each year. B. Using Present Worth analysis for both situations, determine whether Fristale Sdn Bhd should maintain the existing Wafer Bonder machine or replace it to a new one? C. Based on the results of the Present Value analysis, assume whether the company will gain or loss on existing wafer bonder machines if effective income tax of 20% is imposed. State the type of the tax and calculate the amount A semiconductor company, Fristale Sdn Bhd will upgrade its Wafer Bonding Unit to increase the productivity of 12-inch high quality silicon wafer with a minimum return rate (MARR) of 12% (Note: A is a last digit of your matric number, example: Klx180015, A=5). To this end, Fristale Sdn Bhd is studying 3 existing Wafer Bonder machines whether they need to be maintained or replaced with new ones. If the analysis determines that Fristale Sdn Bhd will need to replace the existing wafer bonder machines to the new one, the disposal of the existing machines will have to be done and the company will likely be gain or loss. An existing Wafer Bonder machine is purchased at Base price of RM 120K. This machine can still be used for 7 years and has a very high current market value of RM70K. By the end of the seventh year, the machine could still be sold for at least RM25K (salvage value) even though its market value had shrunk to zero. The operating and maintenance expenses for this existing machine are RM45K per annum. A new Wafer Bonder machine with the same level of performance can be purchased at a base price of RM130K. The new machine has a market value of RM20K by the end of the seventh year with operating and maintenance expenses of RM30K per annum. As an economic consultant to Fristale Sdn Bhd, you are responsible for analyzing the 7 years study period of the following situations; A. As one of the key steps in monitoring its company's cash flow situation, Fristale Sdn Bhd needs to take into account the depreciation value of their assets. Conduct a study to find out the cumulative depreciation of an existing 'Wafer Bonder' machine and investigate the reduction value of an asset in each year. B. Using Present Worth analysis for both situations, determine whether Fristale Sdn Bhd should maintain the existing Wafer Bonder machine or replace it to a new one? C. Based on the results of the Present Value analysis, assume whether the company will gain or loss on existing wafer bonder machines if effective income tax of 20% is imposed. State the type of the tax and calculate the amount
