PWP Investment wants to acquire a business in Singapore. Below is the data needed to compute

the capital budget of the project based on the capital budgeting criteria listed below:

a$.$ Net Present Value

b$.$ Internal Rate of Returns

c$.$ Modified Internal Rate of Return

d$.$ Profitability Index

e$.$ Payback

f$.$ Discounted payback

Data

Initial investment: $S$$$20$ million $(S$$$=$ Singapore dollars$)$

Price and consumer demand:

Year $1$ and $2$: $60,000$ units @ S$$350/$unit

Year $3$:$100,000$ units @ $$$360/$unit

Year $4$: $100,000$ units @ S$$380/$unit

Costs

Variable costs: Years $1$ & $2$ $$$200/$unit$,$ Year $3$ S$$250/$unit$,$ Year $4$

S$$260/$unit

Fixed costs: $S$$$2$ million per year

Tax laws: $20\%$ income tax.

Salvage values: $S$$$12$ million at the end of year $4.$

Noncash Expense $($Depreciation$)$: $$$2,000,000$ every year

Required rate of return: $15\%$

NB: Use Excel in building the tables and use Excel formulas.

Required

$1.$ Write a memo to the Board of Directors advising them of the PWP Investment project's financial viability based on the listed capital budgeting criteria.

$2.$ The Board of Directors is also considering an alternative investment called the Pattyprah Project with a Net Present Value $($NPV$)$ of $$6,000,000$ with the PWP Investment acquisition. Which of the projects should accepted if the projects are:

a$.$ Independent Projects

b$.$ Mutually Exclusive