Q1.

Bagus Padu Sdn Bhd is analysing its capital expenditure proposals for the purchase of machinery in the coming year. The company's required rate of return is 13% and the capital budget is limited to one project for the year. After careful analysis, the company's management accountant has developed the following information about the four projects: Project A Project B Project Project D Accrual accounting rate of return 8% 6% 4% 7% Internal rate of return 13% 15% 11% 14% Net present value RM250,000 RM178,000 RM156,000 RM300,000 Payback period 3 years 35 years 5 years 35 years Required: As a management accountant of the company, advise the management on how the information above can be used in the decision-making process for the new capital budgeting project. Elaborate your answer. (10 marks)