ACTIVITY Exercise 1. A construction company bought a small crane three (3) years ago which cost initially RM 60,000. During the procurement, the life time for the crane is 10 years with salvage cost around RM 10,000 and operational and maintenance cost of RM 15,000 a year. After taking into consideration of depreciation aspect, the current value of the crane is RM 45,000. Due to the demand of the construction needs, the company would like to acquire another bigger size of crane to replace the small crane. The new crane cost is RM 80,000. During the replacement analysis, the company predicts that the market value of the old crane is RM 40,000 and the life time is for 4 years with the salvage value of RM 25,000 and the operational and maintenance cost is RM 15,000 a year. (i) Determine the relevant initial cost (P), the salvage value (F), the life time (n) and the operational and maintenance cost for the original crane. Calculate the sunk cost if any.