You are considering investing RM64000 in new equipment. You estimate that the net cash flows will...

 

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You are considering investing RM64000 in new equipment. You estimate that the net cash flows will be RM14000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of RM5500 at that time. Assume MARR of 12%. a Calculate the annual capital cost CR (ownership cost) for the equipment. b.Determine the equivalent annual revenue. c. Is this a wise investment? Y/N. Format : 83256 Format : 95265 Format : A You are considering investing RM64000 in new equipment. You estimate that the net cash flows will be RM14000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of RM5500 at that time. Assume MARR of 12%. a Calculate the annual capital cost CR (ownership cost) for the equipment. b.Determine the equivalent annual revenue. c. Is this a wise investment? Y/N. Format : 83256 Format : 95265 Format : A

Answer rating: 100% (QA)

To calculate the annual capital cost CR for the equipment we need to determine the present value of the investment including the initial cost net salv... View the full answer