Terracotta Sdn. Bhd. is currently running its entire business operation using a manual system. The company...

  

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Terracotta Sdn. Bhd. is currently running its entire business operation using a manual system. The company plans to develop a computerized system to streamline the operation. It is estimated that the development cost is RM 150,000. The estimated operating costs for Year 1 to Year 5 are RM 20,000, RM 23,000, RM 30,000, RM23,000 and RM 25,000 respectively. The estimated benefits for Year 1 to Year 5 are RM 80,000, RM 75,000, RM 65,000, RM60,000 and RM 70,000 respectively. b) c) Calculate the payback period for the project. Round up your answer to two decimal places. (2 marks) Based on your answer in Question 2 b), evaluate the economic feasibility of the project. (2 marks) Terracotta Sdn. Bhd. is currently running its entire business operation using a manual system. The company plans to develop a computerized system to streamline the operation. It is estimated that the development cost is RM 150,000. The estimated operating costs for Year 1 to Year 5 are RM 20,000, RM 23,000, RM 30,000, RM23,000 and RM 25,000 respectively. The estimated benefits for Year 1 to Year 5 are RM 80,000, RM 75,000, RM 65,000, RM60,000 and RM 70,000 respectively. b) c) Calculate the payback period for the project. Round up your answer to two decimal places. (2 marks) Based on your answer in Question 2 b), evaluate the economic feasibility of the project. (2 marks)

Answer rating: 100% (QA)

SOLUTION 1 Payback period for the project is 3081 years 2 The project is economically ... View the full answer