Q1 (a) Liquidity, Solvency and Effeciency ratio analysis are commonly used indicators to evaluate firm' performances. Differentiate the purpose of those ratios analysis for measuring perfromance of the firm. (15 marks) (b) Investment A, B and C require initial capital outlay of RM140,000 each. Investment A forecasted to generate net cash flow RM35,000 each year until year 5th. Investment B generates net cash flow of RM20,000 in first year and increase by RM10,000 each year until year 5th. The third investment C is expected to genarate a net cash flow of RM50,000 in the first year and a reduction by RM5,000 each year until year 5th. The firm cost of capital is 15%. (1) Evaluate the expected project performance indictors using the Payback, Net Present Value (NPV) and Internal Rate of Return (IRR) (14 marks) Appraise TWO (2) other factors for manager to consider in making investments decision. Q2 The board of directors of Sea & Sand Bhd (SSB), is planning to issue new units of common stocks to the existing shareholder. The price of new issue will be decided based on the latest valuation of the company business. Latest due diligent on forecasted free cash flow (FCF) of the company for year 2019 to 2023 is depicted in Table Q2. Discount factor and capitalization multiple rate for SSB is 8% and 10% respectively. Table Q2: Forecasted FCF 2019-2024 Year 2019 RM'000 2020 RM'000 2021 2022 RM'000 RM'000 2023 2024 RM'000 Terminal value of CF 2,500 26% 1,801 26% 1,888 26% 2,000 26% 2,300 26% ? ? ? ? ? 1,900 EBIT Corporate tax rate Debt free Net income Depreciation Capital expenditure Working capital requiement 480 490 400 500 450 500 300 500 400 500 450 390 80 90 95 80 85 60 (a) Calculate present value of terminal cash flow of SSB. (5 marks) (b) Calculate present value of cash flow of SSB for 2019 to 2023. (10 marks) Propose TWO (2) alternatives valuation method other than FCF discounted method with justifications (c)