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    4 views3 pages

    Exercise CBA by Marhaini

    Uploaded by

    ikhwanstorage

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
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    of 3

    EXERCISE : EVALUATING TRADE OFFS : BENEFIT - COST ANALYSIS

    discount rate, r 12%

    WAGES PER YEAR workers RM 960,000.00


    management RM 480,000.00
    RM 1,440,000.00
    RAW MATERIAL PER YEAR RM 200,000.00
    UTILITIES PER YEAR RM 50,000.00
    OUTPUT PER YEAR RM 3,500,000.00
    SELLING PRICE RM 1,500,000.00
    LAND VALUE RM1,000,000.00

    YEAR BENEFIT COST CASH FLOW DISC FACTOR


    0 RM - RM3,500,000 RM (3,500,000.00) 1.000
    1 RM 3,500,000.00 RM 4,190,000.00 RM (690,000.00) 0.893
    2 RM 3,500,000.00 RM 4,190,000.00 RM (690,000.00) 0.797
    3 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.712
    4 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.636
    5 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.567
    6 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.507
    7 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.452
    8 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.404
    9 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.361
    10 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.322
    11 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.287
    12 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.257
    13 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.229
    14 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.205
    15 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.183
    16 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.163
    17 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.146
    18 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.130
    19 RM 3,500,000.00 RM 1,690,000.00 RM 1,810,000.00 0.116
    20 RM 6,000,000.00 RM 1,690,000.00 RM 4,310,000.00 0.104
    PRESENT VALUE OF BENEFIT PRESENT VALUE OF CASH
    RM - RM 3,500,000.00
    RM 3,125,000.00 RM 3,741,071.43
    RM 2,790,178.57 RM 3,340,242.35
    RM 2,491,230.87 RM 1,202,908.62
    RM 2,224,313.27 RM 1,074,025.55
    RM 1,985,994.00 RM 958,951.39
    RM 1,773,208.92 RM 856,206.59
    RM 1,583,222.25 RM 764,470.17
    RM 1,413,591.30 RM 682,562.66
    RM 1,262,135.09 RM 609,430.94
    RM 1,126,906.33 RM 544,134.77
    RM 1,006,166.36 RM 485,834.62
    RM 898,362.83 RM 433,780.91
    RM 802,109.67 RM 387,304.38
    RM 716,169.34 RM 345,807.48
    RM 639,436.91 RM 308,756.68
    RM 570,925.82 RM 275,675.61
    RM 509,755.19 RM 246,138.94
    RM 455,138.57 RM 219,766.91
    RM 406,373.72 RM 196,220.45
    RM 622,000.59 RM 175,196.83
    RM 26,402,219.60 RM 20,348,487.28
    PRESENT VALUE OF CASH FLOW
    RM (3,500,000.00)
    RM (616,071.43)
    RM (550,063.78)
    RM 1,288,322.25
    RM 1,150,287.72
    RM 1,027,042.61
    RM 917,002.33
    RM 818,752.08
    RM 731,028.64
    RM 652,704.15
    RM 582,771.56
    RM 520,331.75
    RM 464,581.92
    RM 414,805.28
    RM 370,361.86
    RM 330,680.23
    RM 295,250.21
    RM 263,616.26
    RM 235,371.66
    RM 210,153.27
    RM 446,803.76
    RM 6,053,732.32

    positive value shows that benefit more


    than cost, the private firm should
    continue the project

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