Question 1 Not yet answered Marked out of 20.00 P Flag question a) What is the present value of $60,000 to be received in 5 years if the interest rate is 7% p.a. compounding monthly (12 times per year)? (4 marks) b) Consider two projects Mega and Big. The firm is able to afford the investment into both projects. The board of directors has set a maximum acceptable payback period of 4 years. Which project/s should be selected? Show calculations (6 marks) Year Project Mega Project Big ($4,000) ($11,000) 1 $3,600 $4,000 2 $2,200 $3,500 3 $1,400 $2,500 4 $2,200 $1,500 c) A company has total debt of $560m. It is paying an average of 9.5% per annum on its debt. The shareholders has also contributed $140m to the firm by way of an equity investment. The cost of equity is 20%. The company tax rate is 30%. What is the firm's Weighted Average Cost of Capital (WACC) Calculate to 2 decimal places - show calculations? (5 marks) d) Light Lemon Limited needs your help in calculating the NPV of a potential project. The project requires an initial investment of $1,500,000. The expected cash flows for the project for the next 5 years are set out below. The required rate of return is 11%. Calculate the NPV of the project. Show calculations. (5 marks) Year 0 1 2 3 4 5 Cash flows (1,500,000) 300,000 400,000 500,000 350,000 350,000