Exercise: JCon Ptd. Ltd. is required to select a production system. Two production systems have been identified; System P and System Q. Both systems have equal capacity and function, thus, the income is the same if either system is selected. Data on both systems are shown in the Table shown below. Evaluate this problem using Annual Worth (AW) analysis and identify the most economical system. The MARR is 10% per year. (Show your cash flow diagram and calculations). State the assumptions made. Initial cost (RM) Operation cost (RM) System P 400,000 System Q 320,000 8,000 for the first year 15,000 at year 1 and increases with a & increases with an gradient of 4,000 per year until year exponential rate of 3 At year 3, System Q is upgraded 3% per year until the with an estimated cost of 7,000. Due end of its life. to the upgrade, operation cost for System Q from year 4 until the end of its life is 23,000 per year. 0 Salvage Value (RM) Life (Years) 15,000 8 6 (Answer: Ap-82,409 AQ=-95,250 Select P) ' MZMS EEBab3 14