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Please solve this question clearly and snapshot good photos. 3. Carsem Sdn Bhd acquired a high speed electronic assembly machine two years ago for RM
Please solve this question clearly and snapshot good photos.
3. Carsem Sdn Bhd acquired a high speed electronic assembly machine two years ago for RM 50,000. The assembly machine is now valued at RM 25.000 and can be replaced by an upgraded model with a purchase price of RM 42,500. Alternatively, the assembly machine can be kept for maximum of another year before it becomes obsolete. The proposed new model has a useful life of not more than two (2) years. The projected resale values (MV Market Value) and maintenance & operating costs (O&M Costs) for both options are shown in Table Q3 (on year-by-year basis). The MARR used for economic analysis is taken as 15% pa. Table 03 Year New Model Market Value 0 & M Costs 42,500 31,000 10,000 25,000 12,500 Old Model Market Value O&M Costs 25,000 17,000 14,000 a) Tabulate the projected annual costs in the form of loss in market value, cost of capital, annual expenses, marginal costs and equivalent uniform annual costs (UEAC). b) Evaluate the economic merit of either to replace the assembly machine immediately or to wait for another year using the existing machine. c) Discuss the change in the decision expected if the old model can still be used for another year (with resale value of RM10,000) and the new model has a 3 year life (with resale value of RM17,000). 3. Carsem Sdn Bhd acquired a high speed electronic assembly machine two years ago for RM 50,000. The assembly machine is now valued at RM 25.000 and can be replaced by an upgraded model with a purchase price of RM 42,500. Alternatively, the assembly machine can be kept for maximum of another year before it becomes obsolete. The proposed new model has a useful life of not more than two (2) years. The projected resale values (MV Market Value) and maintenance & operating costs (O&M Costs) for both options are shown in Table Q3 (on year-by-year basis). The MARR used for economic analysis is taken as 15% pa. Table 03 Year New Model Market Value 0 & M Costs 42,500 31,000 10,000 25,000 12,500 Old Model Market Value O&M Costs 25,000 17,000 14,000 a) Tabulate the projected annual costs in the form of loss in market value, cost of capital, annual expenses, marginal costs and equivalent uniform annual costs (UEAC). b) Evaluate the economic merit of either to replace the assembly machine immediately or to wait for another year using the existing machine. c) Discuss the change in the decision expected if the old model can still be used for another year (with resale value of RM10,000) and the new model has a 3 year life (with resale value of RM17,000)Step by Step Solution
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