Answer Happy

PRESENT WORTH, FUTURE WORTH AND ANNUAL WORTH ANALYSIS Kaiyukan Lychee is planning to install an automated food can sealing machine to enhance its production. Two different brand sealing machines with same output capacity i.e. 120000 total units per year and selling price $0.375 per unit are proposed. Both machines have different estimated reject rates and no market values at the end of their 7 years useful lives. a) Determine which sealing machines should be chosen at MARR 10% if the present worth analysis is used as basis? b) Calculate an equivalent annual worth by sing the relationship AW = PW (A/P, 1%, n). c) If the estimated reject rate is ignored, predict which machine should be selected if the future worth analysis is used as basis. Capital investment (RM) Annual expenses (RM) Insurance (RM) Estimated reject rate (%) Food Can Sealing Machine HAUK 27400 26520 614 1.7 POYO 44900 19840 1023 5.4