QUESTION $2[40$ MARKS$]$

a$)$ A manufacturing firm has invested in a CNC machining center for its fabrication facility to improve production efficiency. The total capitalized cost of the equipment, including transport and setup, is $$36,000.$ The machine has an expected useful life of $6$ years and a projected salvage value of $$3,000$ at the end of its useful life. As the maintenance and engineering supervisor, you are responsible for preparing the depreciation schedule for financial planning and internal reporting. Based on the information provided, compute the annual depreciation expense and the book value at the end of each year using the following methods:

i$)$ Straight$-$Line Depreciation Method

ii$)$ Sum$-$of$-$the$-$Years'$-$Digits $($SYD$)$ Method

iii$)$ Double Declining Balance $($DDB$)$ Method

$[20$ Marks$]$

$[$CO$2,$ PO$2,$ C$3]$

b$)$ An engineering firm is currently reviewing its logistics and delivery operations to improve cost efficiency. As part of this review, the company is considering the purchase of a new delivery truck to support its field service teams. The proposed truck purchase involves a capital investment of RM$75,000,$ and the vehicle is expected to have a useful service life of $5$ years. By owning and operating the truck, the company anticipates annual before$-$tax savings of RM$20,000,$ which would otherwise be spent on outsourced delivery services. Additionally, at the end of the $5-$year period, the truck is projected to have a salvage value of RM$23,000.$

i$)$ Determine the before$-$tax rate of return on this capital investment.

ii$)$ Calculate the after$-$tax rate of return, assuming the use of the straight$-$line depreciation method and an income tax rate of $34\%.$

$[20$ Marks$]$

$[$CO$2,$ PO$2,$ C$3]$