IMPORTANT

THE WACC FOR 2019 IS 24.26 % AND WACC FOR 2020 IS 22.9 %

4. a. MS Tech has the opportunity to team up with MIT Semiconductor Pte Ltd of Singapore to supply semiconductor process tools. In this three-year project called MS-MIT JV, the required investment outlay from MS Tech is RM8.56 million. The company's hurdle rate is equal to the 2020 WACC attained in the earlier question. The projected cash flows for MS Tech from Day 1 until the end of Year 3 are presented to you as below: Day 1 RM'000 (8,560) End of Year 1 RM000 13,760.4 End of Year 2 RM'000 11,528.6 End of Year 3 RM'000 10,579.5 MS-MIT JV i. i. Determine the Internal rate of return (IRR) for the MS-MIT JV project. Show your workings. (2 marks) Determine the Net Present Value (NPV) for the MS-MIT JV project. Show your workings. (2 marks) Determine the Profitability index (PI) for the MS-MIT JV project. Show your workings. (2 marks) Determine the Payback period (PP) for the MS-MIT JV project. Show your workings. (2 marks) iii. iv