Assoc A cit. . QUESTION 3 (12 marks) JB Hi-Fi's management is considering the two following options of buying a new equipment for a new investment project with the same initial cost. Year Project A -$78,500 $43.000 $29.000 $23,000 $21,000 Project B -$78,500 $21.000 $28,000 $34,000 $41,000 A. Which project the company should choose based on NPV criterion it the required rate of return is 11% (2.5 marks) B. Which project the company should choose based on PI criterion if the required rate of return is 11% (2.5 marks) C. Which project the company should choose if the payback criterion of minimum 3 years applies (2.5 marks) D. After selecting the optimum project, the company is thinking of financing the project! which costs totally 1 million dollars by a capital structure of 40% of debt and 60% of equity. The dividend paid out to shareholders at the end of financial year is $1 800 000. Define the net profit of the company in the current year by applying the residual theory? (2.5 marks) E. Compute the dividend payout ratio (2 marks) Content an. h _3 012 Top De 10 fine meid. search