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(a) Clearly explain what the purpose of the economic indicators of Annual Rate of Return (ROI) are, Payback Period (PP) and Net Present Value (NPV)

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(a) Clearly explain what the purpose of the economic indicators of Annual Rate of Return (ROI) are, Payback Period (PP) and Net Present Value (NPV) on the project selection. (b) Assume that a distillation unit with an initial cost of RM 190,000 is expected to have a useful life of 8 years, with a salvage value of RM 15,000 at the end of its life. Also, it is expected to generate a net cash flow above maintenance and expenses amounting to RM 45,000 each year. Assuming a selected discount rate of 10%, calculate the Net Present Value (NPV)

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