UEM Construction Sdn Bhd is considering investing in a new construction equipment costing RM150,000. Its life is expected to be four years and it will have no scrap value at the end of this period. The following details are given relating to the machinery's activities: į, Unit selling price is RM40.00 and unit variable costs of production are: RM Direct materials 6.00 Direct labour Variable overheads 3.80 5.20 ii. Sales volume relating to production of the construction equipment is expected to be: Year Sales Volume (units) 2,100 2,200 2,500 2,600 2 3 4 iii. Fixed costs amount to RM12,000 per annum. One quarter of the fixed costs is cash flow related items. iv. The company anticipates a cost of capital to be 10%.

UEM Construction Sdn Bhd is considering investing in a new construction equipment costing RM150,000. Its life is expected to be four years and it will have no scrap value at the end of this period. The following details are given relating to the machinery's activities: į, Unit selling price is RM40.00 and unit variable costs of production are: RM Direct materials 6.00 Direct labour Variable overheads 3.80 5.20 ii. Sales volume relating to production of the construction equipment is expected to be: Year Sales Volume (units) 2,100 2,200 2,500 2,600 2 3 4 iii. Fixed costs amount to RM12,000 per annum. One quarter of the fixed costs is cash flow related items. iv. The company anticipates a cost of capital to be 10%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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