Net Present Value Discounted Net Cash Flow Net Present Value Syarikat Bina Maju (BINA) has a theft insurance with a RM5,000 per occurrence deductible. It can install an alarm system in its warehouse for an initial cost of RM9,000. The alarm will last for three years. Annual upkeep of the alarm will be RM500, payable at the end of each year from the time of installation. The alarm is depreciated using the simplified straight-line depreciation method for its 3-year life. With the installation of the alarm system, BINA believes that it could save RM6,500 per year on insurance premium. BINA's opportunity cost of capital for this decision is 10%. Insurance premium is paid at the beginning of the year and is a tax- deductible item when paid. The tax rate is 28%. 082 XYZ should ACCEPT or REJECT implementing risk management by installing a fire sprinkler system in its production floor? Anster 0 1 3 RM RM RM RM Insurance Premium Upkeep Cost Depreciation Before-Tas Earnings Tax (28%) After-Tax Eamings Depreciation Investment Net Cash Flow PVIF @ 10%