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A young chemical engineer is evaluating two machines for a ketchup factory, as in Table below. a) Machine Y is expected to produce 5000 bottles
A young chemical engineer is evaluating two machines for a ketchup factory, as in Table below. a) Machine Y is expected to produce 5000 bottles per hour where two workers will be required at a rate of RM10 per hour each. Machine Z is expected to produce 2000 bottles per hour where five workers will be needed at a rate of RM8 per hour each. At a return of 12% per year, perform the break-even analysis. Justify your answer. r=15=;31 (10 Marks) b) If the annual net cash flows (NCF) for Machine Z for years 1-4, 5-7 and 8-10 are respectively +RM7000, +RM15,000 and +RM5,000, evaluate the discounted payback at i=12%. Use the same initial cost as in Table. (10 Marks)
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