Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Levine Berhad Levine Berhad is considering two mutually exclusive projects, A and B. Project A costs RM180,000, with additional working capital of RM15,000. The project

Levine Berhad Levine Berhad is considering two mutually exclusive projects, A and B. Project A costs RM180,000, with additional working capital of RM15,000. The project is expected to generate RM150,000 in year one and RM75,000 in year two, and final disbursement in year 3 is 30% of the project cost. The working capital will also be recovered at Year 3. Assume the cost of the project of 5.5%. Project B's initial outlay is RM200,000 including purchase of fixed asset of RM50,000. The cash flows are RM80,000 in year one, RM100,000 in year two, RM56,000 in year three, and RM45,000 in year four. At the termination of the project, 50% of the fixed asset value can be recovered. Assume cost of project of 5.3%. Note: reinvestment value refers to future value.

11. Project A's Payback Period is _____.

12. Project A's Discounted Payback Period is _____.

13. Project A's Net Present Value is RM____.

14. Project A's Profitability Index (PI) is ___.

15. Project A's Internal Rate of Return (IRR) is ___%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Evolutionary Finance

Authors: Bartholomew Frederick Dowling

1st Edition

0230502199, 9780230502192

More Books

Students also viewed these Finance questions