You are considering investing RM60000 in new equipment. You estimate that the net cash flows will be RM10000 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 8-year service life and a net salvage value of RM5400 at that time. Assume MARR of 9%. Format : 80733 Format : 83299 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

You are considering investing RM60000 in new equipment. You estimate that the net cash flows will be RM10000 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 8-year service life and a net salvage value of RM5400 at that time. Assume MARR of 9%. Format : 80733 Format : 83299 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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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