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MREGC5001 ASSIGNMENT2: FOR MASTERS STUDENTS Assignment 2: Plant Purchase, Installation and replacement Due date: Please refer to Table 1. Value: 30% (5%+5%+5%+5%+10%) Attempt and submit for assessment the following questions: Q.1. Prepare a report based on course notes, references and research with at least three refereed international journal and / or conference papers on how Annual worth, Present worth and Internal Rate of Return (IRR) are used in capital investment decisions. Report needs to be in a business report format with headers, footers, page numbers, formatted with margins, spell and grammar checked. A manufacturing process can be designed for varying degrees of automation/ capacity with different costs of operations, energy consumption and service requirements including warrant

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Introduction

Emerson Electric Co was originated in 1890 in St. Louis. It is the producer of the electric fans and motors. The company is operating over a century and has been grown from a regional manufacturer to the global solution that has been provided by the powerhouse. The company was established by two brothers Alexander and Charles Meston, from Scotland, who see tremendous and reliable chances in developing the electric motors. They have the financial background of Wesley Emerson, and they initiated the business about the motors of AC and the creations of the first electrical fans that were vended in North America (Co, 2017).

Gaps Identified in Life Cycle Costing

As the life cycle costing is the term that is used to compile all types of costs which the owner of the assets has been incurred during the lifetime of the company. However, this concept is applicable in many areas but still lacks many things in the life cycle costing that are needed to be filled and:

• The business majorly relied on short term planning and ignored the long term plans.
• Some types of petty cash are ignored in the cost accumulation, which can be a major cause of increasing the cost of the company.
• The company only relies on plant manufacturing but ignores the other technical aspects that can be cost heavily.

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