FastBits Electronic Company Sdn. Bhd. is evaluating new precision inspection devices to help verify package quality. The manager has obtained the following bids from four companies. All devices have a life of five years and a minimun attractive rate of return of 4%. The alternatives are mutually exclusive. Description Company A Company B Company C Company D Initial Cost (RM) 450000 Annual Costs (RM) 900 Net Cash Flows (RM) 112500 33320 IRR Determine the annual benefits of the devices from all four companies. Company A CompanyIB Company C: Company I Device from which company has the highest annual benefit? FastBits should reject the bid from which company based on the given individual IRR? Using incremental internal rate o return analysis rom which company, if any, should the manager purchase the new precision inspection device? Use trial and error method with 4% and 10% interest rates. Understood? (YN) Step 1- Eliminate Company Step 2 - Rank Company from no 1-2-3 Step 4 Incremental IRR first comparison Step 5- Remove Company from selection Repeat Step 4 Incremental IRR 2nd comparison Step 5 - Choose Company Demonstrate that the same company selection would be made with proper application of the Present Worth (PW) method. PW Company A PW Company B PW Company C PW Company D Thus, choose Company 19000 560000 200000 12000 23000 140000 7.9% 9000 46200 7.9% 12.4% Format: 523300 Format: 84950 Format: 278000 Format: 59400 Format: A Format: A Format:A Format: A Format :x-x-x Format: 3.3 Format: A Format: 9.6 Format: A Form: 70768 Format: 73692 Format: 73335 Format: 4598 Format: A