(a) By applying incremental analysis with present-worth (PW) method on the above three MEAs (i.e. Equipment A, B & C), identify which equipment is the most preferable.

(b) Assume that the useful life of Equipment B is now changed to 4 years, and selection is limited to make ONLY between equipment B and equipment C.

(i) By applying annual-worth (AW) method and repeatability assumption, determine which equipment should be chosen.

(ii) By applying future-worth (FW) method and co-terminated assumption with study period of 6 years, determine which equipment should be chosen.

(iii) By applying present-worth (PW) method and repeatability assumption with study period of 12 years, determine which equipment shall be chosen.

Ouestion 2 (25 marks) In the replacement analysis for boiler system of a factory facility, there are three types of equipment (i.e. A, B, C) are being considered by the Managing Director of a construction company. Given that the company has adopted a MARR of 10% and has gathered all the related information as given by following table Mutually Exclusive Alternative (MEA) Initial cost (S) Annual Revenue (S) Annual operating cost (S) Salvage value (S) Useful life (years) Equipment A Equipment B Equipment C 20,000100 150,000+ 100 170,000 + 100 26,000 9,000 13,000 52,000 18,000 20,000 40,000 14,000 15,000 Ouestion 2 (25 marks) In the replacement analysis for boiler system of a factory facility, there are three types of equipment (i.e. A, B, C) are being considered by the Managing Director of a construction company. Given that the company has adopted a MARR of 10% and has gathered all the related information as given by following table Mutually Exclusive Alternative (MEA) Initial cost (S) Annual Revenue (S) Annual operating cost (S) Salvage value (S) Useful life (years) Equipment A Equipment B Equipment C 20,000100 150,000+ 100 170,000 + 100 26,000 9,000 13,000 52,000 18,000 20,000 40,000 14,000 15,000