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Barat Corporation is considering two mutually exclusive projects with the useful life of 4 years. The after-tax cash flows for projects K and H are
Barat Corporation is considering two mutually exclusive projects with the useful life of 4 years. The after-tax cash flows for projects K and H are listed below. Year 0 1 2 3 4 Cash Flow K (RM) (100,000) (10,000) 50,000 40,000 50,000 Cash Flow H (RM) (100,000) 50,000 (10,000) 50,000 40,000 Assuming the expected rate of return on the investment is estimated at 8%. From the above information, you are required: a. calculate the payback period for each project. (3 Marks) b. calculate the net present value for each project. (5 Marks) C. based on the two investment techniques, which project should be accepted? (2 Marks) (Total: 10 Marks)
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