ABC company is considering replacing an old machine with a new one. Two months ago their chief engineer completed a training seminar on the new machine's operation and efficiency. The RM4,000 cost for this training session has already been paid. If the new machine is purchased, it would require RM5,000 in installation and modification costs to make it suitable for operation in the factory. The old machine originally cost RM90,000 five years ago and is being depreciated by RM15,000 per year. The new machine will cost RM80,000 before installation and modification. It will be depreciated by RM5,000 per year. The old machine can be sold today for RM10,000. The marginal tax rate for the firm is 40%. Compute the relevant initial outlay in this capital budgeting decision.

Select one:

a. RM77,000

b. RM73,000

c. RM84,000

d. RM72,500