2 The UMCCED Technology is considering two genetic research projects. The required rate of return on these projects is 11%. The two projects provide the following set of after-tax net cash flows. Project AKU -RM50,000 Project ENGKAU Inflow Initial outlay year 1 -RM50,000 RM10,000 RM16,000 Inflow year 2 RM18,000 RM16,000 Inflow year 3 RM15,000 RM16,000 Inflow year 4 RM16,000 RM16,000 Inflow year 5 Required: RM13,000 RM16,000 a. Determine the payback period for each project. If the institute imposes a 3.5-year maximum acceptable payback period, which of these projects should be accepted? marks) (3 b. Calculate the net present value (NPV) for each project. (3 marks) (2 c. Calculate profitability index (PI) for each project. marks) d. Calculate the internal rate of return (IRR) for project ENGKAU. marks) (2 e. Based on the IRR given and your answers in part (b) and (c) above, explain briefly which project should be accepted, I (1) If they are independent? (11) If they are mutually exclusive? (1 mark) (1 mark) Question 3 UMCCED Berhad has projected sales for the first six months of 2020 as follows: Month RM January 100,000 February 120,000 March 150,000 April 300,000 May 275,000 June 200,000 a) Of the firm's sales, 50% is collected in the month of sale, 25% one month after sales and the remaining 25% two months after sales. b) UMCCED Berhad purchases raw materials equal to 70% of sales and it makes its purchases one month in advance of sales. The supplier is paid one month after the purchases. c) The firm incurs and pays a monthly rent expense of RM3,000. d) General and administrative expenses of RM20,000 are recognised and are paid monthly. e) Tax prepayments of RM22,000 are made each quarter beginning in March. f) The firm's ending cash balance as at 28 February 2020 was RM30,000. Required: Prepare a monthly cash budget for March until May 2020. marks) (10