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(b) Last year, your company, a Gl class contractor has invested in a construction machinery costing RM 500,000. The life cycle of machinery is about

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(b) Last year, your company, a Gl class contractor has invested in a construction machinery costing RM 500,000. The life cycle of machinery is about 5 years. Then the company usually will replace with a new machinery to reduce an operation and maintenance cost. The percentage of depreciation value (per year) are shown in Table 1. Select ONE (1) year when you want to sell and calculate the value of sunk cost. OPEN ENDED C3 Year 2 3 4 Table 1 Percent of Depreciation Value and Sold Price Percent of Depreciation Sold Price Value (per year) (RM) 6% 210000 8% 195000 10% 175000 12% 150000 5

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