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(b) Wong and Partners Sdn. Bhd. plans to purchase a new machine to start a manufacturing plant. Two manufacturers offered the estimates below: Item Purchasing
(b) Wong and Partners Sdn. Bhd. plans to purchase a new machine to start a manufacturing plant. Two manufacturers offered the estimates below: Item Purchasing Price (RM) Table 1: Cash flows summary of the investments Supplier A Supplier B 100,000 150,000 Annual Maintenance Cost (RM/year) 3.000 2,500 1,000 2,000 6 9 Salvage value (RM) Life (year) i. Determine which supplier should be selected based on a present worth comparison if the MARR is 15 % per year. (5 Marks) ii. If Wong and Partners Sdn. Bhd. has a standard practice of evaluating all options over a 5-year period. Which vendor should be selected? Assume the salvage values are not expected to change. (10 Marks)
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