JD Sdn Bhd has developed a new industrial detergent that can be used in motor

vehicle garages. It would cost RM million to buy the equipment necessary to manufacture

the blenders, and initially, it would require net operating working capital equal to of the

st year sales amount. Net operating working capital will remain at the same rate. The

project would have a life of years. If the project is undertaken, it must be continued for the

entire years.

The firm believes it could sell units per year. The detergents would sell for RM per unit.

After the first year, JD intends to increase the sales price by annually.

The variable cost is RM per unit and will increase at an inflation rate of The

companys fixed costs would be RM at Year and would also increase at a rate of

annually.

The equipment would be depreciated over a year period, using the straightline method.

The annual depreciation will be calculated based on a salvage value of the equipment at the

end of the projects year life of RM The company, however, estimated the machine

can be sold as scrap for RM The corporate tax rate is

The cost of capital is

a Develop a spreadsheet model and use it to find the projects NPV IRR, and payback