QUESTION $3-$ PART A

Nordin Sihat is a face masks manufacturing company. One of its production activities is to make $3-$ply surgical face mask for medical stores.

Nordin Sihat is considering the replacement of its mask$-$cutting machine that has been used for the past two years. If the new machine is purchased, it would be acquired at the end of year $3.$

Management expects to sell $600,000$ pieces of $3-$ply masks in each of the next $5$ years. The expected selling price is RM $1\mathrm{.}20$ per piece.

Nordin Sihat will either keep the existing machine for another $5$ years $(8$ years in total$)$ or replace the existing machine at the end of year $3$ with a new model that has a $5-$year estimated life.