FastBits Electronic Company Sdn. Bhd. is evaluating new precision inspection devices to help verify package quality. The manager has obtained the following bids from four companies. All devices have a life of five years and a minimum attractive rate of return of 6%. The alternatives are mutually exclusive.

Description	Company A	Company B	Company C	Company D
Initial Cost (RM)	400000	113000	490000	200000
Annual Costs (RM)	900	12000	23000	9000
Net Cash Flows (RM)	100000	31640	122500	46000
IRR	7.9%	12.4%	7.9%	4.8%

Determine the annual benefits of the devices from all four companies. Company A: Format : 400200 Company B: Format : 46980 Company C: Format : 584400 Company D: Format : 67000 Device from which company has the highest annual benefit? Format : A FastBits should reject the bid from which company based on the given individual IRR? Format : A Using incremental internal rate of return analysis, from which company, if any, should the manager purchase the new precision inspection device? Use trial and error method with 6% and 12% interest rates. Understood? (Y/N) Format : A Step 1- Eliminate Company Format : A Step 2 - Rank Company from no 1-2-3 Format : x-x-x Step 4 - Incremental IRR first comparison Format : 5.6 Step 5 - Remove Company from selection Format : A Repeat Step 4 - Incremental IRR 2nd comparison Format : 8.9 Step 5 - Choose Company Format : A Demonstrate that the same company selection would be made with proper application of the Present Worth (PW) method. PW Company A Format : 79540 PW Company B Format : 40230 PW Company C Format : 24086 PW Company D Format : -5420 Thus, choose Company Format : A