A specially built computer system has just been purchased by Progress Greenhouse Products to monitor moisture...
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A specially built computer system has just been purchased by Progress Greenhouse Products to monitor moisture level and to control drip irrigation in hydroponics beds that grow cluster "tradiro" tomatoes. The system can be purchased for RM100,000. It requires a minor preventive maintenance with cost RM3,000 per year. At the end of sixth year, a major system upgrading cost RM15,000 will be required. The profit will have resulted in RM15,000 each year for a period of 20 years and one-off saving in year eleventh for RM 7,000. This system will have a salvage value of RM35,000 at the end of year 20 and the MARR = 7%. Answer the following. (i) Analyze this single project proposal using Benefit Cost Ration (AW). (ii) Justify the acceptability of this proposal A specially built computer system has just been purchased by Progress Greenhouse Products to monitor moisture level and to control drip irrigation in hydroponics beds that grow cluster "tradiro" tomatoes. The system can be purchased for RM100,000. It requires a minor preventive maintenance with cost RM3,000 per year. At the end of sixth year, a major system upgrading cost RM15,000 will be required. The profit will have resulted in RM15,000 each year for a period of 20 years and one-off saving in year eleventh for RM 7,000. This system will have a salvage value of RM35,000 at the end of year 20 and the MARR = 7%. Answer the following. (i) Analyze this single project proposal using Benefit Cost Ration (AW). (ii) Justify the acceptability of this proposal
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