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Please help answer the questions with formula given. Please show your calculation steps. b) Amir Holding is in the process of opening tenders to potential
Please help answer the questions with formula given. Please show your calculation steps.
b) Amir Holding is in the process of opening tenders to potential investor to manage Rasa Sayang resort properties at the rental cost of RM250,000 per year for duration of 20 years. You as young entrepreneur had interest in the projects and preparing an investment proposal to be presented to your funder. The investment required amount to RM300,000 as a capital and the company is expected to earn a return of RM650,000 per year. The operating and maintenance cost are RM175,000 per year. At the end of the contract , the company is required to maintain a good operating condition of the properties which will require a cost of RM150,000. Draw the cash flow diagram for this project. If the funder MARR is 8.0%, calculate the IRR and ROI and evaluate whether the company should accept or reject the offer. CO1/P03/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
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