Reference no: EM132618356

You are managing a company called Max Sdn Bhd, which uses various equipment to run its operations. This equipment needs to be serviced and repaired from time to time. For the last five years, your company spent, on average, RM9,000 per year on the maintenance of this equipment. You estimate that this yearly maintenance expense will continue to be around the same amount for some foreseeable future. One of the principal equipment suppliers approaches you with an offer to service your company's equipment. They offer to fully maintain your equipment for five years in exchange for RM33,000 to be paid right after the contract is signed. If your company requires a minimum return of 9% on all its investments, would you accept this offer?