7. Seri Kayangan Local City Council intends to buy a garbage truck to replace the broken old truck. There are two alternatives that is mutually exclusive for the garbage truck and the details information regarding this are shown in the table below: Alternative X Alternative Y 60,000 1,500 Cost and Sales Items Initial Cost, RM Operation and Maintenance Cost per month, RM Repair cost for every 2 years, RM Repair cost for every 4 years, RM Salvage value, RM Lifespan, Year 9,500 1,700 5,000 7,000 10,000 7,000 (i) Do the evaluation on both alternatives using Present Worth (PW) method. Assume the interest for the loan is 12% compounded every month. (ii) Determine which alternative is the best alternative to be selected.
7. Seri Kayangan Local City Council intends to buy a garbage truck to replace the broken old truck. There are two alternatives that is mutually exclusive for the garbage truck and the details information regarding this are shown in the table below: Alternative X Alternative Y 60,000 1,500 Cost and Sales Items Initial Cost, RM Operation and Maintenance Cost per month, RM Repair cost for every 2 years, RM Repair cost for every 4 years, RM Salvage value, RM Lifespan, Year 9,500 1,700 5,000 7,000 10,000 7,000 (i) Do the evaluation on both alternatives using Present Worth (PW) method. Assume the interest for the loan is 12% compounded every month. (ii) Determine which alternative is the best alternative to be selected.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![7. Seri Kayangan Local City Council intends to buy a garbage truck to
replace the broken old truck. There are two alternatives that is mutually
exclusive for the garbage truck and the details information regarding this
are shown in the table below:
Alternative X Alternative Y
60,000
Cost and Sales Items
9,500
Initial Cost, RM
Operation and Maintenance Cost
per month, RM
Repair cost for every 2 years, RM
Repair cost for every 4 years, RM
Salvage value, RM
Lifespan, Year
1,500
1,700
5,000
7,000
7,000
10,000
3
(i)
Do the evaluation on both alternatives using Present Worth (PW)
method. Assume the interest for the loan is 12% compounded
every month.
(ii)
Determine which alternative is the best alternative to be selected.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f9fa382-edf4-4aa2-a18c-617136787908%2F9b61d2f3-10c0-4743-afa6-0b5d2e5e00c2%2F96d703i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:7. Seri Kayangan Local City Council intends to buy a garbage truck to
replace the broken old truck. There are two alternatives that is mutually
exclusive for the garbage truck and the details information regarding this
are shown in the table below:
Alternative X Alternative Y
60,000
Cost and Sales Items
9,500
Initial Cost, RM
Operation and Maintenance Cost
per month, RM
Repair cost for every 2 years, RM
Repair cost for every 4 years, RM
Salvage value, RM
Lifespan, Year
1,500
1,700
5,000
7,000
7,000
10,000
3
(i)
Do the evaluation on both alternatives using Present Worth (PW)
method. Assume the interest for the loan is 12% compounded
every month.
(ii)
Determine which alternative is the best alternative to be selected.
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