Question
Build either a mini theme park or a 10-unit chalet on a parcel of land located by the beach side area. Adequate funding is available,
Build either a mini theme park or a 10-unit chalet on a parcel of land located by the beach side area. Adequate funding is available, and both projects are known to be acceptable. The mini theme park requires an initial investment of RM1,600,000 and is expected to provide operating net cash inflows of RM300,000 per year with an expected increase by 10% each year for 10 years with an expected rate of return equivalent to 8% per annum. The 10-unit chalet is expected to cost RM1,500,000, and to provide a growing stream of operating cash inflow over a 10-year life. The initial operating net cash inflow is RM220,000 for the first year and it will increase by 5% each year
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