Answered: a) From Life Cycle Cost (LCC)…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

a) From Life Cycle Cost (LCC) Analysis, would you Brand X or Brand Y crane? What is your recommendation and why?

b) Based on the Minimum Acceptable Rate of Return (MARR), if the company hurdle rate is 20 %, would you choose Brand X or Brand Y and why? – include the cashflow diagram

Transcribed Image Text:As a Project Engineering had been tasked to make an analysis and to recommend to your company on the economic justification on option to purchase a used 250MT mobile crane. The decision is in between Brand X or Brand Y 250 MT mobile crane to be used for the company's project construction activities as well as providing some rental business for three years. As the crane is not used for the whole time, 10-days a month it is being rented out. The Brand X is the newer crane which having better fuel efficiency and lower maintenance cost. Based on your data gathering, you have this information derived for the analysis. No. Description Unit Brand X Brand Y 5 years warranty RM 2,000,000 250 MT mobile crane specification unit No warranty Cost of the crane Unit RM 1,200,000 Save on the crane rental from 3rd 3 party Estimated income from rental Monthly RM 80,000 RM 80,000 4 Daily RM 5,000 RM 5,000 Estimated maintenance cost plus inspection by Puspakom and DOSH Per 6 RM 3,000 RM 8,000 months Estimated Operator and fuel cost Monthly RM 15,000 RM 20,000 Dispose value at end of the project 7 construction, 3 years Unit RM 1,200,000 RM 600,000

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