Globe Engineering SDN. BHD. is evaluating a new Water Sprinkle System offered by two companies. Table Q2(a) shows the list of proposals. Select the preferred proposal based on incremental analysis annual worth, AW if the given MARR is 12% and useful life is 9 years. Draw the cash flow diagram.

Table Q2(a)

Alternatives	Purchase Value (RM)	Annual Savings (RM)	Annual Cost (RM)	One-off Cash flow (RM)	Market value (RM)
Proposal A	166,000	26,000	5,000	1,200 saving in year 6	3,000
Proposal B	150,300	25,500	3,000	4,000 saving in year 6	1,500

(9 marks)

(b) The Robotic Training Centre has decided to purchase a computer system for RM113,000 with a trade-in of their old system (asset class 00.12). The old system has a book value BV of RM15,000 during trade-in. The purchase of the system will increase the companies revenue by RM20,000 annually, whereas the associated operating expenses are expected to be RM2,000 annually. Refer to Appendix for MACRS Class Lives and recovery Periods (ADS recovery rates) respectively.