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3. Firdaus Sdn Bhd is a company that provides car rental services. The company is now considering on buying a new car to increase its
3. Firdaus Sdn Bhd is a company that provides car rental services. The company is now considering on buying a new car to increase its service capacity. There are two models, Suzukee and Toyoda. The price for each Suzukee and Toyoda model is RM74,000 and RM 60,200 respectively. Both models can be used for 5 years. The annual after tax net cash flows for the models are as follows: Suzukee Toyoda 24,000 24,000 Year Cash inflows 1 32,000 2 32,000 3 32,000 4 32,000 5 5 32,000 The company's required rate of return is 14%. 24,000 24,000 24,000 Based on the information given, calculate; 1.Payback period for both project 2. Net Present Value (NPV) 3. Profitability Index (PI) 4. Which project that company must choose? Why
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