and to service the iting customers demand Whid at 200,000 per truck the time, Senin Sanotace with of RM230,02%). The new lood trucks will be deprecated the chinehodowy One of the old trucks was bought 6 yeats mo ay when in een in bought 3 years ago al 1908). Both kinds were being deprecated in the te B years. It the old trucks are not replaced today. I can soll be used to wothies 5 tocke years to be truck Seruling Sdn. Bhd. hopes to sell of us food truck bites in 5 years time to start a chain of the same food truck is estimated to be RM70,000 per truckin 5 years time. If the old food trucks are replaced today, it is estimated that this will help to increase the compass Meanwhile, this would also lead to some changes in its operating costs as per the table bec. Operating costs per truck Old Trucks New Trucks Salary RUSO,000 YANA Fuel Costs RM500 Service and repait costs RM5,000 WASCO RM3,000 In addition, it is estimated that the company's wwentory would need to be increased by 05.000 thenien trucks were bought day. the end of year 5,50 per cent of this amount is recoverable. The company's debt to equity ratio is 025 while its cost of equity and cost of debt ate estimated to be sound 1136 and 85% pes annum respectively. The tax rate is 30%. Required: (a) Calculate the company's weighted average cost of capital. (b) Calculate the relevant present value of cash flows (on a net present value basis to determine whether Serving Sdn. Bhd.ch replace the old trucks? and to service the iting customers demand Whid at 200,000 per truck the time, Senin Sanotace with of RM230,02%). The new lood trucks will be deprecated the chinehodowy One of the old trucks was bought 6 yeats mo ay when in een in bought 3 years ago al 1908). Both kinds were being deprecated in the te B years. It the old trucks are not replaced today. I can soll be used to wothies 5 tocke years to be truck Seruling Sdn. Bhd. hopes to sell of us food truck bites in 5 years time to start a chain of the same food truck is estimated to be RM70,000 per truckin 5 years time. If the old food trucks are replaced today, it is estimated that this will help to increase the compass Meanwhile, this would also lead to some changes in its operating costs as per the table bec. Operating costs per truck Old Trucks New Trucks Salary RUSO,000 YANA Fuel Costs RM500 Service and repait costs RM5,000 WASCO RM3,000 In addition, it is estimated that the company's wwentory would need to be increased by 05.000 thenien trucks were bought day. the end of year 5,50 per cent of this amount is recoverable. The company's debt to equity ratio is 025 while its cost of equity and cost of debt ate estimated to be sound 1136 and 85% pes annum respectively. The tax rate is 30%. Required: (a) Calculate the company's weighted average cost of capital. (b) Calculate the relevant present value of cash flows (on a net present value basis to determine whether Serving Sdn. Bhd.ch replace the old trucks
