Question $13$b$.$ The owner of Berakas Motor Berhad has given you a task to evaluate two different project

proposals from the Marketing Department and Operations Department. The Marketing

Department is proposing to introduce a new all$-$terrain vehicle on top of its existing fleets.

The company has spent $$500,000$ on research and development on the new all$-$terrain

vehicle. The Operations Department is proposing the purchase of a new machinery for

$$200,000.$ If the new machinery is purchased, three existing employees of the company who

presently are earning a salary of $$50,000$ per annum each will have to work extra hours with

additional salary of $$10,000$ per annum each.

Required:

$($i$)$ For the Marketing Department, explain to the owner on how the $$500,000$ research and

development expenses should be treated in calculating the Net Present Value $($NPV$)$ of

the project to introduce the new all$-$terrain vehicle.

$(3$ marks$)$

$($ii$)$ For the Operations Department, explain to the owner on how the additional salary

should be treated in calculating the NPV of the project to buy the new machinery.

$(3$ marks$)$