You are considering investing RM61000 in new equipment. You estimate that the net cash flows will be RM11000 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 RM4800 at that time. Assume MARR of 9%. a.Calculate the annual capital cost CR (ownership cost) for the equipment. Format: 60287 b.Determine the equivalent annual revenue. Format: 77548 Format: A c.Is this a wise investment? Y/N.

You are considering investing RM61000 in new equipment. You estimate that the net cash flows will be RM11000 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 RM4800 at that time. Assume MARR of 9%. a.Calculate the annual capital cost CR (ownership cost) for the equipment. Format: 60287 b.Determine the equivalent annual revenue. Format: 77548 Format: A c.Is this a wise investment? Y/N.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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