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DAAR Berhad is thinking about expanding its facilities. The expansion that cost RM 2 1 0 , 0 0 0 will provide after tax cash

DAAR Berhad is thinking about expanding its facilities. The expansion that cost RM210,000will provide after tax cash flow of RM60,000 for the first year and increasing by RM10,000 perannum for the next four years. Liquidation of the equipment will net RM10,000 at the end offive years. If the firm required rate of return is 14 percent, calculate:a) payback periodb) net present valuec) profitability indexd) Which project should Memens Furniture choose and why?

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