B. MECHANICAL ENG.

TECHNOLOGY (MACHINING) WITH HONOURS,

FACULTY OF MECHANICAL ENGINEERING & TECHNOLOGY, UNIVERSITI
MALAYSIA PERLIS (UniMAP)

MMK32103 - MANUFACTURING ECONOMICS ASSIGNMENT

You will do this assignment individually. This assignment must be submitted via Google Link as
below:
https://docs.google.com/forms/d/e/1FAIpQLSemM-p-
_fR_tdwDdF6WCRS09RTdKfJBSeyi8mQt4ffNs9GFlQ/viewform

ASSIGNMENT FORMAT
Question 1: (*use M.S. Excel)

A manufacturing company is considering replacing a machine, the initial cost of which is RM

25,000. Because the company intends to reuse that machine component after the replacement,
the scrap value at the end of any year is negligible. Given that the maintenance cost is zero for
the first year and then increases by RM 2000 per year for the next ten years.

(a) Determine the economic life of the machine if interest, i = 0%, in a table form.
(10 Marks)

(b) Determine the economic life of the machine if interest, I = 15%, in a table form.

(10 marks)

Question 2: (*Hand Written)

Toshiba purchased a new machine for the first time at RM 150,000. This machine is expected to
last ten years. The supplier estimates that the machine's salvage value at the end of its life is RM
12,000. Determine the depreciation charge and book value at the end for a period of 5 years.

(a) Using the straight-line method of depreciation.

(5 Marks)

(b) Using the declining balance method of depreciation by assuming 0.2 for K
(5 Marks)

(c) Using the sinking fund method of depreciation with an interest rate of 12%, compounded
annually.
(10 Marks)