Panjang Ltd is a manufacturing company that specialises in producing safety apparatus for the… 1 answer below »

Panjang Ltd is a manufacturing company that specialises in producing safety apparatus for the construction industry. The company manufactures four main products: hard hats, safety glasses, noise reducing ear plugs and face masks. New technology was recently developed that would enable the firm to produce a larger volume of safety glasses in any given year. Management have requested you to investigate whether they should continue to invest in the current technology that is used to develop these safety glasses or consider upgrading to the modern technology.
The firm currently produces safety glasses using a machine called the Glasses-O-Matic. This existing machine is at the end of its useful life, so the firm would be required to buy a new machine immediately if they decide to proceed with this technology at a price of $2,500,000. The Glasses-O-Matic has an economic life of five years, and the table below summarises the number of units this machine is able to produce each year across its useful life:

 

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