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# An industrial robot purchased 3 years ago for RM280,000 to reduce costs in a production line

is now too slow to satisfy increased demand. The robot can be upgraded now for RM140,000
or sold to another company for RM80,000. The annual maintenance and operating costs for
this robot will be RM170,000 per year and will have a salvage value of RM60,000 after 3
years. If upgraded, the presently owned robot will be retained for only 3 more years, then
replaced with a new robot.
The replacement robot, which will serve the company now and for at least 8 years will cost
RM440,000. Its salvage value will be RM100,000 for years 1 to 5, RM40,000 in year 6 and
RM20,000 in years 7 and 8. It will have an estimated operating costs of RM130,000 per
year.
a)

Draw the cash flow diagrams for the old and new robot.
b)
Perform the replacement analysis using the annual worth method for a 3 year
study period at 15% per year.
Should the company replace the presently owned robot now? Why?

c)

a)
Defender
0
140,000

1

2

60,000
3

170,000

170,000

170,000

80,000
Challenger
100,000
0

1
130,000

2

3

130,000

130,000

440,000
b)

AWD = -(80,000+ 140,000)(A/P,15%,3) - 170,000 + 60,000
(A/F,15%,3)
= -220,000(0.43798) - 170,000 + 60,000(0.28798)
= \$-249,076.8
AWC = -440,000(A/P,15%,3) - 130,000 + 100,000(A/F,15%,3)
= -440,000(0.43798) - 130,000 + 100,000(0.28798)
= \$-293,934

c)

Keep the defender; lower AW

a) What is depreciation?
[1 mark]
b) Idea Perfect Sdn Bhd purchased a RM196,000 hole-punching machine with a freight charge of
RM1,000 and an installation cost of RM3,000. The machine has a recovery period of 5 years and the
salvage value is expected to be zero. Complete the depreciation below.
[24 marks]
Year

Straight Line
depreciation
without
switching
[2 marks]

Book value
using SL
method
[2 marks]

Double
declining
balance (DDB)
depreciation [5
marks]

Book value
using DDB
method
[5 marks]

Straight Line
depreciation if
switching [4
marks]

Depreciation
value if
switching
[6 marks]

0
1

RM40,000

RM200,000
RM160,000

RM80,000ãã

RM200,000
RM120,000ãã

RM40,000ãã

RM80,000ãã

2

RM40,000ã

RM120,000ã

RM48,000ãã

RM72,000ãã

RM30,000ãã

RM48,000ãã

3

RM40,000ã

RM80,000ã

RM28,800ãã

RM43,200ãã

RM24,000ãã

RM28,800ãã

4

RM40,000ã

RM40,000ã

RM17,280ãã

RM25,920ãã

RM21,600ãã

RM17,280ãã

5

RM40,000ã

RM10,368ãã

RM15,552ãã

RM21,600ãã

Depreciation is defined as a gradual decrease in the utility of fixed assets with use and time.
Per ã = 0.5 marks
Year to switch: Year 4
ã

COEB 442: EXERCISE 5/ASSIGNMENT 3
NAME:________________________________________ SID NO.:_________________
SEC.:____
Saturn Computer Corporation can produce 30,000 personal computers a year on its daytime
shift. The fixed manufacturing costs per year are RM3 million and the labor cost is RM9
million.
i)

Compute the unit manufacturing cost for the daytime shift.

[2 marks]

000)/30.(RM3. Would adding a second shift increase or decrease the overall unit manufacturing cost at the plant? Show your calculations.000+(2.000 = RM397.000+9.3) = RM520.000.600. (10. The unit labor cost for the second shift would be 25% higher than the day shift. c.000. Saturn is considering adding a second shift.200.25)(9.a RM400 (0. QUIZ 1 .000.3) = RM120 b.000)/60. but the total fixed manufacturing costs would increase only to RM3.000 = RM400/unit ii. a) What unit profit would Saturn realize on each computer? [2 marks] b) What is the unit sales price? [2 What is the profit if 10.000 iii.000 units per year. [2 marks] ANSWERS i.6 million from RM3 million.000 units are sold? [2 marks] c) marks] iii) To increase its production to 60. RM400 (1.ii) Suppose Saturn Corporation adds 30% to its daytime unit manufacturing cost for corporate profit.5/unit Second shift decreases unit cost.Unit manufacturing cost: (RM3.000)(120) = RM 1.

Depreciation is considered as expenses in the income statement. 9. Retained earnings is the sum of net income and dividends.:_______________________ SECTION__________ True/False Questions 1. 5. NO. 3. 10. 6. 4. 2. 8. ANSWERS 1T 6F 2F 3T 7 T 8F 4F 9T 5T 10F QUIZ 2 . Breakeven is the point where TR = TC. The interest payment for a loan will be the same for all the payment periods. Accounts Receivables and marketable securities are long term assets. Total manufacturing cost only include variable manufacturing cost . Notes payable is a current liability.NAME: _____________________________ SID. Gross margin is the difference between Sales and COGS. The revenue received by a firm should be enough to cover the capital costs only. Discounted payback period consider the time value of money. 7.

YEAR 0 1 2 3 4 To find the future value.000(F/P.000 ? 5.000 -2.000 A A 10.000 -2.000 -2.i.000 -2.1) 3.:_______________________ SECTION__________ Write the function notation .N) 2. NO.3)(F/P.000 2000 (P/A.000(F/P.i. CASH FLOW(RM) 5.i.000 -2. CASH FLOW (RM) 10.i.4) . i. YEAR 0 1 2 3 4 To find the value of A. 1. 2) . YEAR 0 1 2 3 4 CASH FLOW(RM) ? -2. 2)(A/P.NAME: _____________________________ SID.000 -2.i.2. To find present value.000(F/A.

in 2015 were RM400.000 Purchase of Land RM300.COEB 442: EXERCISE QUESTIONS (1) QUESTION 1 [10 marks] Sweet Corporation reported the following information for the year 2013.000 Issuance of Common Stock RM200. Operating expenses for Becy. Becy's tax rate was 25%. Becy. Becy had RM2.000 Sale of Equipment RM20.000 (a) What amount will the corporation report as the net cash provided by financing activities on the cash flow statement? [4 marks] (b) If the net cash used for the investing activities is (RM400.000? [2 marks] QUESTION 2 [25 marks] (a) In 2015.000. [4 marks] (c) What is the total net cash flow for Sweet Corporation for the year 2013 if the net cash provided by operating activities is RM300. Becy has also rented out one of its office space for RM5. (a hardware retail company) sold 10. This debt carried an average interest rate of 5%.000 units of its product at an average selling price of RM400 per unit.000). Inc. calculate the value of the acquisition of long term investments. Finally. Becy's fiscal year runs from January 1 through December 31.000 Payments of Bonds Payable RM300. Payments of Dividends RM60. and RM100. The average cost of goods sold are RM250 each. Bhd. Sdn.000 per month. .000 in debt outstanding throughout all of 2015.000 for administration and other operating costs.000 for marketing expenses.

On 1 January. and net profit.000 = (RM 260. operating profit (EBIT).000) (b) Cash Flows from Investing Activities: Sale of Equipment Purchase of Long-Term Investments Purchase of Land Net Cash Used by Investing Activities (c) Q2 i) RM20. showing clearly gross profit.(i) Given the information.000 (120. The methods are (1) straight line where useful life is 5 years and residual value is RM10.000-160.000) (300.000) (400.000 (160.000-400. marks] ANSWERS Q1 Cash Flows from Financing Activities: Payment of Dividends Payment of Bonds Payable Issuance of Common Stock Net Cash Used by Financing Activities RM(60. What can you conclude from the difference between the calculated ratios? Briefly discuss.000) TNCF= 300.000. will be affected if the double declining balance method is used rather than the straight line method? [9 marks] (ii) Name and briefly describe two (2) out of four (4) factors that need to be considered in depreciation calculation.000 and (2) double declining balance method. [4 marks] (b) A company is exploring the impact of the two method of depreciation. (i) Show how the company's operating profit in financial year 3 (FY3).000) (300. [9 marks] (ii) Calculate the gross profit and net profit ratios.000) amount rate Calculated [3 .000) 200. construct Becy's 2015 Income Statement. it bought a machinery for RM150.

000 RM 645.000 RM 100.000 122.000 difference in profit if use DDB /// / BV 150.000 // // .000 90.000 Admin RM expense 500.000 Operating income RM .500.5m ÷ 4 m = 37.000 Gross profit RM + Rental income 5.COGS x 10.645m ÷ 4 m= 16.500.000 RM 60.000 RM 215. /// / 10 / x ½ = 5 marks (b) i) Cal c Straight line 28.13% =21.5% 16.000 RM 4.000 60.37%) needed to cover the expenses in the company's operations.000 x 10.000 28.000.000 RM 860.RM 400 RM 250 Sales .5% /// net profit ratio = RM0.000 x 12 month x 5% x 25% EBT RM 860.000 Dep Y0 Y1 Y2 DDB per year BV /// / 40% Dep 150.000 .000 RM 1.Interest 2.000 RM 960.000 RM 500.000 RM .Marketing 100.13% /// The difference between the gross & net profit ratios are the % of sales (37.000.Tax Net profit // // // // / / // // // // 18 / x ½= 9 marks ii) gross profit ratio = RM1.000 RM 2.000 RM 100.

000 36.000 RM6 (c) If the company is making a sales of RM100.000 (d) In order to try and boost profit to RM100. the company is considering the two following possibilities: (ii) (i) launch a marketing campaign which will increase the costs by RM20.000 28.400 // profit would be more / / 18/ x ½ m = 9 marks ii)  Depreciable life (how long?)  Salvage value (disposal value)  Cost basis (depreciation basis)  Method of depreciation (how?) Any 2 with short description x 1 ½ m = 3 marks COEB 442: EXERCISE QUESTIONS (3) Best Stationery Manufacturing Company produces a 2-Hole puncher with the following results in 2014 with a sales of 10. is it sufficient to cover the total costs incurred ? Calculate to answer. Item Sales Per Unit Variable Cost Per Unit Fixed Costs RM 45 30 90. Insufficient because it is above the breakeven sales of RM270.400 // RM6.000 94.000 21.000 54.Y3 28. RM150. which will cost an extra RM3 per unit .000 improve product quality.000 units.000 next year.600 32.000 66.000 (a) Calculate the total contribution margin. (b) Calculate the average profit.000.

.000 .10.000 annually for 8 years. At an interest rate of 12% per year.000 in year 1 and amounts decreasing by RM10.12%.000 UNITS.000. b. What is the present worth (P) of the total costs of the software if the interest rate is 8%? ANSWERS a.9131) = 270.14. Pcash =RM16278.8) 300.000 + RM150.000 5.000 Total interest= RM50. The Company is considering purchasing a used van . A computer company borrowed RM1million for 3 years at 5% per year simple interest.50 OPTION B CASH PAYMENT (RM) 20.2 EXERCISE 4 Q1 a.Which option would you suggest to the management by comparing the units to be produced and sold? Option A .10.000 12 48 394.000 now and annual payments of RM1000 per year for 6 years starting 4 years from now for annual upgrades. Price Down Payment Salvage Value at the end of the 48th month APR (%) Length of Financing Monthly payment for 48 months OPTION A DEBT FINANCING (RM) 20. 300.000 Total due = RM1.000 .000 6. Details of the financing options is as in the table below.150. c. Interest per year=1. How much money will the company repay at the end of 3 years? b.869.000 12 48 By using the Present Worth Analysis. The cash outflow associated with a manufacturing operation is expected to be RM300. show that debt financing is the most economical option for the company to adopt.258.000 b. additional vehicle is needed to increase efficiency in distribution.000(A/G.000(2.500 UNITS (e) If the company decides to launch any of the options in (d) above. Pdebt = RM16.000.000x5%= RM50.000 x 3 years = RM150. An engineering technology group just purchased new CAD software for RM10. 17.000 = RM1. calculate the annual equivalent cash flow.9 . relatively fewer units to sell compared to option B.000 6.

(d) 20%.9 x 0. At year 3: RM1000(P/A.9 (P/F. ii) Pay RM5000 now.963.000 = RM29.21= RM13. at the end of the next four years pay RM6000. at the end of one year pay RM8000. The machine may be paid for in one of two ways: i) Pay the full price now minus a 3% discount. ANSWERS i)97% x 30.9 From year 3 to year 0 : 4622.100. (c) Two cash flows has the same economic effect and could be traded for one another.6) = 1000 x 4. Draw the cash flow diagrams for the two alternatives.000 mixing machine. (b) Charging interest only on the principal amount.c.000. ii)Year 0 = RM5. year 1 RM8000.21 Q2 The manager of a manufacturing company has decided to purchase a new RM30. Annual Percentage Rate (APR) ii.000+RM3963. interest period. the P value is RM29.8%.8%.6229) = 4622. ANSWERS (a) Because of earning power and purchasing power.3)= 4622. monthly . year 2-year5 RM6000. (c) What is economic equivalence? (d) "20% Compounded Monthly". Identify the: i. Q3 (a) Why money has a time value? (b) Define simple interest.8573 = 3963.21 At year 0: RM10.100 cash flow: year 0.

27473) = \$13.000(A/F.736 . ANSWERS a.000.000 three years from now. A = 50. (c) A small oil company wants to replace its Micro Motion Coriolis flowmeters with Emerson F-Series flowmeters in Hastelloy construction.000 P = \$28. what was the principal amount of the loan? (b) A company expects to pay \$20.60 b.5) = RM79854 c.000(0. P=20.000 = P + P(3)(0. P is to be determined in year 0.07) 1. Construct the cash flow diagram and find the present worth of the payments at an interest rate of 8% per year.3) = 50.000 per year for a contracted cleaning service starting at the end of next year and continuing for a total of 5 payments.20%.Q4 (a) An engineer who was in the business of customizing software for small construction companies repaid a loan that she got 3 years ago at 7% per year simple interest. The replacement process will cost the company \$50.21P = 35. Total = P + Pni 35. How much money must the company set aside each year beginning one year from now in order to have the total amount in three years? Assume the company will invest its funds at 20% per year.000(P/A. If the total amount she repaid was \$35.8%.925.

T 2. Liabilities C. Income statement is the only document that tell us how a business is performing and where it stands financially. Which of the following is not an item in a company＊s balance sheet? A. Assets B. The opportunity cost of a choice is A. T Section B: Multiple Choice Questions [1 mark each] 4.Section A: True/False Questions [1 mark each] 1. Operating expenses D. A corporation allows limited liability. the value of the best alternative given up. B. bonds. 6. Physical depreciation can occur in any fixed asset in the form of wear and tear from use. the value of the worst alternative given up. D. C. 3. C. F: all financial statements. accounts payable. 5. Stockholder＊s equity Long term liabilities include A. the value of the differences among the alternatives. copyrights. B. . the value of the choice that is made.

the gradual decrease in the utility of total assets with use and time. B. C. 9. D. changes in the gradual decrease in the utility of fixed assets because of demand. Working capital = Total Assets 每 Total Liabilities D. the gradual decrease in the utility of fixed assets with use and time. C. changes in the gradual decrease in the utility of total assets because of technology. Depreciable property does not include A. equipment. deposits from customers. B. Which of the following is correct? A. inventories. Working capital = Total Assets +Total Liabilities Depreciation is A.Current Liabilities C. 7. vehicles. . Working capital = Current Assets . Working capital = Current Assets + Current Liabilities B.D. machinery. D. 8.

the rate of return. Assets must wear out B. maintenance costs [2 m] (c) A firm＊s statement of cash flow reports the impact of three activities on cash flows over an accounting period. transportation costs.. [2 marks] ANSWERS A sole proprietorship is a business conducted by one person. Which of the following factors is not true for asset depreciation? A. [2 marks] ANSWERS Purchase price of the machine. A partnership is conducted by two or more persons or entities. Assets must become obsolete C. Assets must be used in business D. Assets must have an indefinite service life Section C: Short Answer Questions/Problem Solving Questions QUESTION 1 [6 marks] (a) State ONE difference between a sole proprietorship and a partnership. [2 m] (b) List down TWO factors to consider if you plan to buy a new cutting machine. List down TWO of the activities.10. [2 marks] .

. . . . . . . . . . . . .000 Interest expense .000 Liabilities and Stockholders＊ Equity Current liabilities: Accounts payable . . . . . . . . . . 36. .RM 11. . . . . . investing. . . . .000 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RM 30. . . 30. . . . . . . . . . . . . . . Other assets . . . . . . . 40. . .000 Classic Company Balance Sheet For the Year Ended December 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . .000 Income taxes . . . . . . . . .000 Expenses: Selling and administrative expenses . . . . . . .000 Accounts receivable (net) . . . . . Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . plant. . .000 . . RM 300. . . . . . . . . . . . 2015 Net sales . . . .000 Inventory . . . . . . . . . 2015 Assets Current assets: Cash . . . . . . . . . . . . . . . .000 60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52. . . . . . . . . . . 200.000 Notes payable . . . . . . . . . . . .000 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 are given as below. . . . . financing [2 m] QUESTION 2 [12 marks] The income statement and balance sheet data for Classic Company for the year ending December 31. . . . . 〞 Dividends payable . . .000 Property. . . . . . . . . . . . . . . . . . . . . . Classic Company Income Statement For the Year Ended December 31. . . . . . . . . . . . . . . . . 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. . . . . . . . . .ANSWERS Operating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and equipment: Land and building . . . . . . . 2. . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . (a) What is the gross profit of the company? mark] (b) Is the company making a net profit of 20% of sales? marks] (c) [1 [3 Determine the long term liabilities for the company in year 2015. . . . .000 Cost of goods sold . . . . . . . . .000 2. .24% [1m] -Percentage of funds needed to purchase assets that were obtained through borrowing. . . . . . . . . . . .000[1m] = 16%[1 m]: NO. .000/300. . . . . . .000 Gross margin . . . . . (a) 每 (e). . . .000[1m] (b) 48. . . . . . .RM300. . . . . . . .000-100. . . . . . . . . . . . . . . . [1 mark] ANSWERS (a) Net sales . . . . . . . . . . . . . . . . . . . . . 100. . . . . . . . . . 200. . . . . . . . . . . . . . . . . . . . . . . . .000 [1 m]= RM67. . .000-34. . . Stockholders＊ equity: 100. . . .000[1 m] (d) Debt Ratio : 101/201[1m] = 50. . . . . [2 marks] (d) What is the percentage of funds needed to purchase assets that were obtained through borrowing? [2 marks] (e) Can Classic Corporation pay all of its current liabilities without depending on its inventory? [3 marks] (f) for Give ONE possible example of cash outflow from investing activities Classic Company. . . . . . RM 34. . . . . . . . . . . .000 LTL = 201. . .Income taxes payable . . . . . . . not 20% [1 m] (c) Total current liabilities . . . . . . . . . . . .000 Total Assets 201. . . . . . .000 Stockholders ＊ equity: 100. . .000 Calculate to answer the following questions. . . .

[2 marks] ANSWERS (110.000 iv. ii. and is expected to have a salvage value of 10% of the price of the new equipment at the end of 10 years.000 = RM90.000 = RM100. It has an expected useful life of 10 years. marks] the depreciable cost (I-S) of the new machine.000 每 20. [2 marks] ANSWERS \$110.5 [1 m].000-10.000+ 7.000)/10 = RM10.000 to install the machine.000 每 10. the net value of the machine at the end of the second year.000 . [2 ANSWERS 110. The company has to pay RM3.000.building.land.000 to deliver the machine to the factory and an additional \$7. marks] the cost basis of the new machine. [2 ANSWERS 100. YES[1m] (f) Purchased of equipment. calculate: i. the amount of the annual depreciation.000 [1 m]= 1.machinery [1 m] QUESTION 3 [12 marks] Healthy Food Company bought a new handling equipment that cost RM100.000-52.000 = \$110.000 iii.000 +3.000. (a) If Healthy Food uses the straight-line method of depreciation.(e) (103.000)/34.

6000 = RM39.000 * 0.2 = RM22.600. [ T] . [T] 4. [T ] 2. Dep. Advertising is a non manufacturing cost. what is the amount of total depreciation of the machine at the end of the second year? [4 marks] ANSWERS 2(1/10) = 20% [1 mark] Yr 1:RM110.000 [1 mark] Yr 2: RM88.: RM22. [T ] 3. Period cost consist of the costs involved in the maintenance and repairs of machines. At zero production. [1 mark] Section A: True/False Questions [1 mark each] 1.000 + RM17. A company should expand its output for as long as the marginal revenue from additional units of output is lower than the marginal costs of producing and selling them.2 =RM17.000 * 0.3(b) If Healthy Food uses the double declining balance method of depreciation. total cost is the same as total fixed cost.[ F ]: MR > MC 5. Building rents are fixed costs.600 [1 mark] Acc.

000 to buy the tools to manufacture a certain household item. Finding the present worth of a future sum is known as the compounding process. [F]: discounting Section B: Problem Solving Questions QUESTION 1 [10 marks] The fixed costs for a manufacturer is RM10. It costs 65sen for the material and 60 sen for the labor for each item produced. how many items should be produced and sold to make a profit RM100. Calculate: (a) the marginal contribution and interpret your answer .[ F]: borrower 7. marks] [2 (b) the break even sales . [ T] 8. ii. marks] [3 the average costs at a profit of RM100. The manufacturer can sell the items for RM2. Purchasing power decreases as time goes by due to inflation. marks] (c) of i. Economic equivalence exists between two cash flows that have the same economic effect and could therefore be traded for one another in the financial marketplace. [T] 10. Interest is a cost to the lender. [3 marks] [2 .6.000. Compound interest is interest earned on only the principal amount during each interest period. [F]: Simple interest 9.50 each.000.

10%.000. TC=10000+1. If the company deposits RM100.10) ﹟ = RM220.000 = RM2.000(0.25 x 88.000/2.200.000. TC= 10000+(1. Q=10000/1.25Q.000.000﹟ (c) 2.000/88.200. [7 marks] .000 c) i.25 =88000 units ii. 4) ﹟ = 2.000 ( 1.000 ﹟ Interest charged for year 2 =2. how much will the company have to deposit in year 4 in order to have the money it needs to buy the trailer? Interest rate is 9% per year.000.000 in year 2 and RM75. Interest at the end of the first year amounted to RM200.000.000 AC=120.000 (F/P.4641) ﹟ = RM2.36 QUESTION 2 [9 marks] A manufacturing company borrowed RM2 million so that it could purchase a new equipment.000 =RM1.25 left to cover fixed costs and profit.000 + 200. (100000+10000)/1.000)(100%)﹟﹟ = 10% per year﹟ (b) Total due after 1 year = 2. b) TR=2.50 =RM20.928.000)=RM120.200﹟ QUESTION 3 [11 marks] (a) KL Moving and Storage Company wants to have enough money to purchase a new trailer in year 5 at a cost of RM400.000 in year 3.25 =8000 units=8000x RM2.50 每 1.ANSWERS a) 2.50Q.25 = RM 1.000. (a) What was the interest rate (%) on the loan? marks] [3 (b) How much interest was charged for year 2? marks] [3 (c) What is the lump sum payment at the end of year 4? marks] [3 ANSWERS (EACH ﹟ 1 MARK) (a) Interest rate = (200.

3310) = RM 133100﹟ F2 = 75.000(F/P.750 = RM176150﹟ Value of deposit in year 4: 176. 9%.1) ﹟ = 176. 10%. [4 marks] ANSWERS(EACH ﹟ 1 MARK) P at year 2: 20.2) ﹟ = 64.794(P/F.4) ﹟ = 20.000(3.000(1.10%.10%.150(P/F.000(F/P.000(P/A.11﹟ -END OF QUESTION PAPER- .2) ﹟ = 75.8417)= RM54.ANSWERS(EACH ﹟ 1 MARK) F1 = 100.9091)= RM160.000-133100-90.750﹟ Future value of the 3rd deposit in year 4 : 400.97﹟ (b) KL Moving and Storage also wish to determine what lump amount would have to be deposited into an account at an interest of 9% per year to provide annual withdrawals of RM20. 5th year and 6th year.3) ﹟ = 100.794(0.000(1.500 (0.9%.537.2397)=RM64.794﹟ P at year 0 : 64.2100) = RM90. 4th year.137.000 to maintain their existing trailer on the 3th year.