Zeliens Smart-Tech is considering purchasing a new super-power computer system to improve the data analysis in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Zeliens Smart-Tech is considering purchasing a new super-power computer system to improve the data analysis in their Research and Development. Two types of system are available on the market and the company plans to use the service of either system not more than ten years. The purchase and installation of Supercomputer A is RM 30,000. The annual maintenance cost for this system is RM 2,000 per year and to make sure the system runs effectively, the parts of the system must be changed three times per year, which costs them RM 800 for each replacement. The system would last for five years; at which time it should have no more salvage value. Supercomputer B will cost them RM 40,000. This system has a special requirement during installation. This requirement will require additional software installation and is estimated to cost RM 3,000. The useful life for this system is 10 years with a market value of only 25% from the initial value at the end of life. This system has a special offer from the supplier: Free maintenance cost for one year and the annual maintenance cost of RM 2,200 starts at year 2 until year 10. The annual operating cost for both systems are shown in Table 3. In addition, the company has another option of renting a Standalone Technology System (STS) for RM 13,000 per year with the rental cost increasing by 5% per year. The system is fully maintained by the rental company. Based on the above information: (a) Suggest, with justifications, THREE (3) alternatives available to the company to have a new super-power computer for 10 years including the cash flow diagram illustration. (9 marks) (b) Recommend which alternative appears to be the best at MARR of 10% per year considering Present Worth Method. (26 marks) (BMFG 3213/ BMFG 4623) -English Version- Table 3: Annual Operating Cost Super-computer A Super-computer B (RM) Year (RM) 1600 2 7,000 2,200 3 7,000 2,800 4 7,000 3,400 5 4,000 6 4,600 7 5,200 8 5,800 9 6,400 10 7,000 Zeliens Smart-Tech is considering purchasing a new super-power computer system to improve the data analysis in their Research and Development. Two types of system are available on the market and the company plans to use the service of either system not more than ten years. The purchase and installation of Supercomputer A is RM 30,000. The annual maintenance cost for this system is RM 2,000 per year and to make sure the system runs effectively, the parts of the system must be changed three times per year, which costs them RM 800 for each replacement. The system would last for five years; at which time it should have no more salvage value. Supercomputer B will cost them RM 40,000. This system has a special requirement during installation. This requirement will require additional software installation and is estimated to cost RM 3,000. The useful life for this system is 10 years with a market value of only 25% from the initial value at the end of life. This system has a special offer from the supplier: Free maintenance cost for one year and the annual maintenance cost of RM 2,200 starts at year 2 until year 10. The annual operating cost for both systems are shown in Table 3. In addition, the company has another option of renting a Standalone Technology System (STS) for RM 13,000 per year with the rental cost increasing by 5% per year. The system is fully maintained by the rental company. Based on the above information: (a) Suggest, with justifications, THREE (3) alternatives available to the company to have a new super-power computer for 10 years including the cash flow diagram illustration. (9 marks) (b) Recommend which alternative appears to be the best at MARR of 10% per year considering Present Worth Method. (26 marks) (BMFG 3213/ BMFG 4623) -English Version- Table 3: Annual Operating Cost Super-computer A Super-computer B (RM) Year (RM) 1600 2 7,000 2,200 3 7,000 2,800 4 7,000 3,400 5 4,000 6 4,600 7 5,200 8 5,800 9 6,400 10 7,000
Expert Answer:
Answer rating: 100% (QA)
s new suer muter system is being nsidered by Zeliens Smrt teh in rder t inrese ir irultin nd minimise unmfrtbly high temertures in the mnys ffie The rrtin my hse between tw different tyes f systems nd ... View the full answer
Related Book For
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines
Posted Date:
Students also viewed these economics questions
-
A small manufacturing firm is considering purchasing a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of machine A and...
-
A small manufacturing firm is considering purchasing a new boring machine to modernize one of its production lines. Two types of boring machines are available on the market. The lives of machine A...
-
The Simon Machine Tools Company is considering purchasing a new set of machine tools to process special orders. The following financial information is available. Without the project, the company...
-
Apply the product rule for exponents, if possible. y 4 y 5 y 6
-
Refer to the Buena School District bus data. Prepare a report on the maintenance cost for last month. Be sure to answer the following questions in your report. a. Around what values do the data tend...
-
The CPA examines all unrecorded invoices on hand as of February 28, 2012, the last day of the audit. Which of the following misstatements is most likely to be uncovered by this procedure? Explain. a....
-
Symbol B could represent (a) computation of net pay. (b) separation of erroneous time cards. (c) validation of payroll data. (d) preparation of the payroll register.
-
Natalie, Alana, Melissa and Pina are all sisters who inherited a block of 6 residential units. Each of them holds 25 of the 100 issued shares in the company. Melissa is single and lives in one of the...
-
As a prospective owner of a club known as The Red Rose, you are interested in determining the dollar volume of sales needed to turn a profit next year. You decided to break down the club's sales into...
-
Prepare general journal entry. Billy Bob's Bikes Transactions Nov. 1: Billy Bob paid in advance for an 8-month insurance policy, which will begin today. He paid $3,856 cash for the policy. Nov, 1-...
-
You are given four numbers 2,5,7,X where X is an unknown number. If the average (mean) of the four numbers is 5. What is X?
-
Discuss the three general roles of management. What are the purposes of these roles? What specific roles fall under each general role?
-
List some of the major laws that affect human resource management. To which HRM issues do these laws apply?
-
Do you believe that humankind is getting more or less violent and cruel? What evidence can you bring to support your position?
-
What is a social audit? How can a social audit help a business improve its social responsibility activities?
-
What is meant by promotion, transfer, and termination of employees?
-
What is the difference between Organisational resilience and Operational Resilience
-
The landing gear of an aircraft with: mass of 2000 kg the spring-mass-damper system Consider that the runway surface is y(t) = 0.2 cos 157.08t stiffness of the spring is 5 x 105 N/m. What is the...
-
Describe the four- step process for solving time value of money problems.
-
For a bond when the market rate of interest is less than the face rate of interest: (a) Describe the cash outflows shown on the budgeted cash flow statement over the life of the note. (b) Describe...
-
How much will an investment of $ 10,000 be worth at the end of five years if it earns? A. 10 percent interest compounded annually? B. 10 percent interest compounded semiannually? C. 10 percent...
-
Three years ago, Girston Gravel Pit purchased a material conveyor system. The company has decided to sell the system and acquire more advanced technology. Data relating to the existing system follow....
-
You have just purchased a new car, making a down payment of \(\$ 8,000\) and financing the balance of the purchase cost on an installment credit plan. According to the credit agreement, you will pay...
-
Although they should be considered independently, investing and financing decisions are often considered together. Consider the case of a consumer acquiring a new car. The consumer can purchase a car...
Study smarter with the SolutionInn App