MM Semiconductor is planning to expand its water treatment plant. You have gathered the required information for evaluation and list out five proposal from several consultant.. You have been asked to perform an economic analysis to select the most appropriate equipment to purchase out of the five options. Each of this equipment has a useful life of six years. The company's MARR is 10% per year. Using incremental investment analysis technique (IRR-technique), which equipment should be selected? A B D E Investment cost RM100,000 RM120,000 RM150,000 RM130,000 RM 140,000 RM120,000 RM3,500 Annual expenses RM10,500 RM8,500 RM10,500 RM10.200 RM5,000 Annual RM40,000 RM25,500 RM50,500 RM30,700 RM40,500 revenue Market value RM22,000 RM10,000 RM30,000 RM18.000 RM30,000 IRR 24.2 % 1.74 % 20.6 % 5.3 % 19.1 % [15 Marks] [CO2, PO11, C3] Answer: Assumption/justification 1: (1 mark) Include table in correct arrangement in PDF (1 mark) PW (10%) = RM (2 marks) PW (1%) = RM (2 marks) IRR = % (1 mark) Conclusion/Justification 2: Since IRR (1 mark) PW (10%) = RM (2 marks) PW (25%) = RM (2 marks) IRR = % (1 mark) Conclusion/Justification 3 : Since IRR (1 mark) Conclusion/Justification 4: EQUIPMENT is chosen (1 mark) MM Semiconductor is planning to expand its water treatment plant. You have gathered the required information for evaluation and list out five proposal from several consultant.. You have been asked to perform an economic analysis to select the most appropriate equipment to purchase out of the five options. Each of this equipment has a useful life of six years. The company's MARR is 10% per year. Using incremental investment analysis technique (IRR-technique), which equipment should be selected? A B D E Investment cost RM100,000 RM120,000 RM150,000 RM130,000 RM 140,000 RM120,000 RM3,500 Annual expenses RM10,500 RM8,500 RM10,500 RM10.200 RM5,000 Annual RM40,000 RM25,500 RM50,500 RM30,700 RM40,500 revenue Market value RM22,000 RM10,000 RM30,000 RM18.000 RM30,000 IRR 24.2 % 1.74 % 20.6 % 5.3 % 19.1 % [15 Marks] [CO2, PO11, C3] Answer: Assumption/justification 1: (1 mark) Include table in correct arrangement in PDF (1 mark) PW (10%) = RM (2 marks) PW (1%) = RM (2 marks) IRR = % (1 mark) Conclusion/Justification 2: Since IRR (1 mark) PW (10%) = RM (2 marks) PW (25%) = RM (2 marks) IRR = % (1 mark) Conclusion/Justification 3 : Since IRR (1 mark) Conclusion/Justification 4: EQUIPMENT is chosen (1 mark)