Project Ellayiah This company is planning to invest in a project called Ellayiah . The management accounting department received the following information Capex Project period Revenue Supplies expense Salary Utilities Discount Rate Sale of asset @ end of project Net working Capital $35000 5 years $19000 6000 3500 500 5.5% $15,000 $10700 The company's tax rate is 12%. The project also earned $5200 as interest revenue. The capital expenditure is depreciated using straight line method over the project and will have a residual value of $15000. the company will have to rent a building for $4000 during the project life. The net working capital will be returned at the end of the project REQUIRED a) Calculate the initial investment b) Calculate each year cash flow c) Calculate the terminal value of the asset used d) Calculate the NPV e) Calculate the Profitability Index [PI] f) Calculate IRR of the project Question 2 Selected data for Babar Ltd of past year of operations are presented below: Product X Production ( in units] 4750 Sales ( in units] 2800 $15.00 Selling price General activity (DL Hours) General activity (Machine hours) 5080 1800 DLH RATE $21.00 Manufacturing cost Raw Materials ($1 3400 Direct Labour Hours 140 Manufacturing Overhead Variable overhead $2350 Fixed overhead $5600 Non manufacturing cost Variable selling $2618 Fixed selling cost $3560 Estimated total fixed cost for the company = $54,000. Company uses direct labour hours to assign cost in its absorption method of allocating cost to manufacturing overhead. REQUIRED 1. Calculate product cost of product X using variable cost. 2. Calculate product cost of product X using absorption cost .. 3. Calculate variable cost of goods for the year 4. Find the variable-costing net income 5. Calculate cost of goods for the year using absorption method 6. Find the net income using absorption method