The company where you are employed wishes to produce latex gloves in a more profitable manner. You have been assigned to conduct a comparison study in order to assist the company in making a decision. The latex gloves can be produced using three different alternatives; Alternative K1, Alternative K2 or Alternative K3. With each alternative, the estimated capital investment amount as well as its annual expenses savings are given in Table S3. For Alternative K1, the annual savings are estimated to increase at the rate of 6% per year (Hint: f = 6%). Annual savings for Alternative K2 are estimated to increase at a constant rate of RM200 per year starting after year one (Hint: G=RM200). For the Alternative 3, the savings are of uniform series. Assume that the MARR is 12% per year with a useful life of each alternative is six years. Market value at the end of year six is zero for all three alternatives.

a)Determine the order of the alternatives priority and explain its basis of order.

b)Is the selected base alternative acceptable? Show how did you come up with that conclusion.

c)Determine the PW for all alternatives.

d)Using the incremental analysis method, determine the preferred alternative among all three given alternatives.
 

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Pelaburan permulaan Initial investment Simpanan tahunan Annual receipts Penghujung Alternatif Alternatives Tahun End of Year 0 1 2 3 4 5 Jadual S3/Table S3 6 K1 RM 82,500 RM 22,500 ƒ = 6% RM 30,110 K2 RM 105,000 RM 26,250 G = RM200 RM 27,250 K3 RM 73,500 RM 18,000 A = 18,000 RM 18,000 Pelaburan permulaan Initial investment Simpanan tahunan Annual receipts Penghujung Alternatif Alternatives Tahun End of Year 0 1 2 3 4 5 Jadual S3/Table S3 6 K1 RM 82,500 RM 22,500 ƒ = 6% RM 30,110 K2 RM 105,000 RM 26,250 G = RM200 RM 27,250 K3 RM 73,500 RM 18,000 A = 18,000 RM 18,000

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aDetermine the order of the alternatives priority and explain its basis of order The order of the alternatives priority can be determined based on the ... View the full answer