A young chemical engineer is evaluating two machines for a ketchup factory, as in Table below....

 

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A young chemical engineer is evaluating two machines for a ketchup factory, as in Table below. Initial cost Annual cost Salvage value Life Machine Y RM 40,000 RM 5,000 RM 10,000 25 years Machine Z RM 25,000 RM 3,000 10 years a) Machine Y is expected to produc 5000 bottles per hour where two workers will be required at a rate of RM10 per hour each. Machine Z is expected to produce 2000 bottles per hour where five workers will be needed at a rate of RM 8 per hour each. At a return of 12% per year, perform the break-even analysis. Justify your answer. (10 Marks) b) If the annual net cash flows (NCF) for Machine Z for years 1-4, 5-7 and 8-10 are respectively +RM 7000, +RM 15,000 and +RM 5,000, evaluate the discounted payback at i-12%. Use the same initial cost as in Table. (10 Marks) A young chemical engineer is evaluating two machines for a ketchup factory, as in Table below. Initial cost Annual cost Salvage value Life Machine Y RM 40,000 RM 5,000 RM 10,000 25 years Machine Z RM 25,000 RM 3,000 10 years a) Machine Y is expected to produc 5000 bottles per hour where two workers will be required at a rate of RM10 per hour each. Machine Z is expected to produce 2000 bottles per hour where five workers will be needed at a rate of RM 8 per hour each. At a return of 12% per year, perform the break-even analysis. Justify your answer. (10 Marks) b) If the annual net cash flows (NCF) for Machine Z for years 1-4, 5-7 and 8-10 are respectively +RM 7000, +RM 15,000 and +RM 5,000, evaluate the discounted payback at i-12%. Use the same initial cost as in Table. (10 Marks)

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To perform the breakeven analysis and evaluate the discounted payback we need to calculate the following a Breakeven analysis for Machine Y and Machine Z b Discounted Payback for Machine Z Lets start ... View the full answer