Investment of RM1.2 million in new machine to expand production capacity is being consideration by a company. Following are the budgeted cash flows given for next 6 years:

Years RM000

1 (80)

2 110

3 160

4 250

5 220

6 180

Discount factors at the cost of capital of 10% per annum are:

Years

1 0.909

2 0.826

3 0.751

4 0.683

5 0.621

6 0.564

Required:

i. Calculate discounted payback period. (5 marks)

ii. Calculate Net Present Value using 10% discount rate for the company. (5 marks)