Answered: Table 1: Forklift Cost Information Item…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The engineering department have appointed you on a task purchasing new forklift to transport sheet metal part. From your research, two types of forklift have been finalized as shown in Table 1 for their material handling plan in 6 years. The company also has another option; using manual material handling with 3 workers and the salary of cach worker is RM1,200 per month.

(a) Suggest TWO (2) decisions on material handling alternatives to the company with suitable assumptions.

(b) Develop the cash flow diagram for above suggestion alternative.

Table 1: Forklift Cost Information
Item
Forklift A
Forklift B
First Cost, RM
90,000
50,000
Annual Operating Cost,
2000
500
RM
Change Maintenance part
Useful Life, years
800 every 2 year
3000 рer year
3
Salvage Value, RM
30,000
10,000

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