Investment of RM820,000 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)