Falcon Berhad ("FB") is a conglomerate Malaysian public -listed company. The company has five different divisions ranging from Oil & Gas, Consumer Products, Plantation, Property & Construction and Manufacturing. The overall company cost of capital is 12.75%. The management of FB has identified the following projects in their strategic plans for growth within the identified divisions (Figure 1). However, they have only a limit of RM 55 million in their capital expenditure budget. Further information on the projects is provided in Figure 1 below: Figure 1 (RM '000) (RM Million) Project Initial investment Annual revenue Variable Costs Annual fixed costs Life of project (years) A B 17,000 25,000 15,000 15,500 15,250 25,000 14,320 18,575 9,750 13,000 5,250 10,000 35% 40% 25% 20% 25% 15% 2,500 4,000 1,500 6,000 1,500 4,200 4 8 4 10 15 20 D E F Other relevant information on the projects is provided below: The cash flows of the projects are confined to the lifetime of each project. All cash flows occur on anniversary dates. Assume that the Malaysian tax rate is 25%. The variable cost is a percentage of the annual revenue The annual fixed costs do not include depreciation. Depreciation is based on straight line basis over the lifetime of each project. There is no salvage value applicable on all investments. Projects C and D are mutually exclusive. Required: (a) Determine the Net Present Values and Benefit Cost Ratio for each of the projects above. Show your workings clearly. (12 marks) (b) Based on this, what is the optimal investment based on its capital rationing and how much internal fund will be available to PB. (13 marks) (c) Format - Assignments are expected to be legible, tidy, well organized and written in clear understandable English with relevant headings and subheadings. Please use 11/2 spacing, Times New Roman/Arial, Font Size 12, Justified for the individual assignment. Referencing - Please use Harvard referencing - refer to MIB for guidelines on referencing and plagiarism as well as assessment offences. (5 marks) (Subtotal: 30 marks) (Overall Total = 40 marks)