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b) Rapid Zoomer, a well-known hi-speed train company is offered to invest in new LRT line from Tanjung Karang to Sekinchan. The investment required RM
b) Rapid Zoomer, a well-known hi-speed train company is offered to invest in new LRT line from Tanjung Karang to Sekinchan. The investment required RM 200 million as a capital and the company are expected to earn a return of RM10 million per year for 30 years. The operating and maintenance cost are RM2.5 million per year. At the end of the contract, the company is required to provide charter system for commuting passengers to suburb area which will require a cost of RM15 million. Draw the cash flow diagram for this project. If the interest rate is 7.0%, calculate the Internal Rate of Return (IRR) and evaluate whether the company should accept or reject the offer. CO1/PO3/C4 (10 marks)
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