Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The State government has purchased 2 0 0 bicycles to replace the current Link Bikes. In addition, they have also purchased a total of 5

The State government has purchased 200 bicycles to replace the current Link Bikes. In
addition, they have also purchased a total of 50 E-scooters to be placed in Gurney Bay,
Straits Quay Promenade, and Queens Waterfront Promenade. The purchase cost of 200
bicycles is RM 300,000 and 50 E-scooters is RM50,000. The cost of maintenance of the
bicycles is RM80,000 in the first year, RM90,000 in the second year and RM95,000 in the
third year. The cost of maintenance of the E-scooters is RM30,000 in the first year,
RM35,000 in the second year, and RM40,000 in the third year. The benefits of bicycles are
RM 160,000 in the first year and RM200,000 in the second and third years. On the other
hand, the E-scooters' estimated benefit is RM 80,000 in the first year and RM120,000 in the
second and third years. At the end of the third year, the bicycles and E-scooters can be resold
as second-hand for a total of RM40,000 and RM 5,000. Assume a discount rate of 3% is
used.
a). Calculate the present value of net benefits assuming the benefits are realized at the end
of each of the three years. Also, draw the timeline of benefits and costs.
(3 marks)
b) Calculate the present value of net benefits assuming that the benefits are realized at the
beginning of each of the three years. Also, draw the timeline of benefits and costs.
(2 marks)
c) Calculate the present value of net benefits assuming that 50% of the benefits are realized
at the beginning of the year and the balance at the end of the year.
(3 marks)help
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting, Enhanced

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

11th Edition

1119594596, 9781119594598

More Books

Students also viewed these Accounting questions

Question

What is Bacons approach to scientific methodology?

Answered: 1 week ago

Question

=+ How do some of them single you out when you're the consumer?

Answered: 1 week ago