Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help answer the questions. b) Rapid Zoomer, a well-known hi-speed train company is offered to invest in new LRT line from Tanjung Karang to
Please help answer the questions.
b) Rapid Zoomer, a well-known hi-speed train company is offered to invest in new LRT line from Tanjung Karang to Sekinchan. The investment required RM 200 million as a capital and the company are expected to earn a return of RM10 million per year for 30 years. The operating and maintenance cost are RM2.5 million per year. At the end of the contract, the company is required to provide charter system for commuting passengers to suburb area which will require a cost of RM15 million. Draw the cash flow diagram for this project. If the interest rate is 7.0%, calculate the Internal Rate of Return (IRR) and evaluate whether the company should accept or reject the offer CO1/PO3/C4 (10 marks) Sample Cash Flow Diagram APPENDIX- Discrete Cash Flow Examples Illustrating equivalence Factor Notation Type Find/Given and Formula Relation (F/P, I, N) = (1+1) F = P(F/P, I, N) Compound Single 1 Amount P/F (P/F. i, N) P=F(P/F,1,N) Present worth F/P amount (1+i) - 1 P/A Present worth (P/A, i, N) P=A(P/A, I, N) (A/P, I, N) A = P(A/P, I, N) N1 N A/P Capital recovery (1+i) - 1 Uniform Series F/A F = A(F/A, i, N) Compound (F/A, i, N) amount 1 0 1 2 N-1 (A/F, I, N) A = F(A/F, i, N) A/F Sinking fund A A (1+1)-1 The effective annual interest rate i = |(1+"|-- 1 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started