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Old equipment is considering to be replaced. Below is the data of the equipment: Present MV = RM57000 Present BV = RM27000 Depreciation MV in
Old equipment is considering to be replaced. Below is the data of the equipment: Present MV = RM57000 Present BV = RM27000 Depreciation MV in 5 years = RM6000 (year 1-4), RM3000 (year 5) = RM18500 Annual expenses = RM27000 New suggested equipment to be leased: Annual operating expenses = RM12200 Annual leasing cost = RM24300 MARR (after taxes) = 9% t = 40% Analysis period = 5 years Based on the data given, construct the analysis table for the cash flows of both; defender and challenger. Based on the data given, construct the analysis table for the cash flows of both; defender and challenger. Keep the defender (C)=(A)-(B) (E)=(A)+(D) .k (A) BTCF (B) Depreciation (D)=t(C) Cash Flow for Income Taxes Taxable income ATCE 10 1 2 3 14 5 15 Replace with challenger EOY.kl BTCF Cash Flow for Depreciation Taxable Income ATCE Income Taxes 2 3 14 5 Calculate the IRR % From your calculation, should the old equipment be replaced
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