Question
(b)GlobalSatellite Network company are increasing its booster thrust power to win more mini satellite launch contracts from USA companies. A piece of earth-based tracking equipment
(b)GlobalSatellite Network company are increasing its booster thrust power to win more mini satellite launch contracts from USA companies. A piece of earth-based tracking equipment is expected to require an investment of RM520,000.00 and will result in a profit of RM42,000.00 annually. Research contribution attribute will amount one-off grant saving RM110,000.00 in fifthyear. The equipment requires a minor service overhaul annually that cost RM5,000.00 per year. Ateleventhyear, a major overhaul costing RM25,000.00 will be required. This equipment will have a salvage value of RM95,000.00 at the end of twentieth year andthe MARR = 5%. Evaluate whetherthis project is desirable investment by using the Benefit-Cost Ration (AW). Include the cash flow diagram in your calculation.(7marks)
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