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Honeydew Sdn. Bhd has been presented with an opportunity to invest in a project. Investment Required is RM60,000,000, Annual Gross Income is RM14,000,000, Annual




Honeydew Sdn. Bhd has been presented with an opportunity to invest in a project. Investment Required is RM60,000,000, Annual Gross Income is RM14,000,000, Annual Operating Costs is RM5,500,000 and nil for Salvage Value after 10 years. The project is expected to operate as shown for ten years. If your management expects to make 10% on its investment before taxes. Calculate the Internal Rate of Return (IRR) for this project and would you recommend Honeydew Sdn. Bhd this project? Explain. (5MARKS)

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