MEASAT centers are increasing its booster thrust power to win more mini satellite launch contracts from USA companies. A piece of earth-based tracking equipment is expected to require an investment of RM700,000 and one-off grant saving RM100,000 in year 3. The equipment requires a minor service overhaul for the first 7 years that cost RM5,000. per year. At the end of seventh year, a major overhaul costing RM25, 000. will be required and will result in a profit of RM32,000 each year from the eight year through the 20th year. This equipment will have a salvage value of RM60,000 at the end of year 20 and the MARR = 5%. Answer the following questions: i. Analyse the Present Worth of this proposal. Show the cash flow diagram. ii. Justify the acceptability of this proposal.
MEASAT centers are increasing its booster thrust power to win more mini satellite launch contracts from USA companies. A piece of earth-based tracking equipment is expected to require an investment of RM700,000 and one-off grant saving RM100,000 in year 3. The equipment requires a minor service overhaul for the first 7 years that cost RM5,000. per year. At the end of seventh year, a major overhaul costing RM25, 000. will be required and will result in a profit of RM32,000 each year from the eight year through the 20th year. This equipment will have a salvage value of RM60,000 at the end of year 20 and the MARR = 5%. Answer the following questions:
i. Analyse the Present Worth of this proposal. Show the cash flow diagram.
ii. Justify the acceptability of this proposal.
Step by step
Solved in 3 steps with 1 images
