You are considering investing RM64000 in new equipment. You estimate that the net cash flows will be RM12000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 12-year service life and a net salvage value of RM5200 at that time. Assume MARR of 7%.

a.Calculate the annual capital cost CR (ownership cost) for the equipment.

b.Determine the equivalent annual savings.

c.Is this a wise investment? Y/N.

Question Ref. No: 3202 You are considering investing RM64000 in new equipment. You estimate that the net cash flows will be RM12000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 12-year service life and a net salvage value of RM5200 at that time. Assume MARR of 790. Format: 8673 Format: 38883 a.Calculate the annual capital cost CR (ownership cost) for the equipment. b.Determine the equivalent annual savings c.Is this a wise investment? Y/N. Format : A