QUESTION 1 (Show your working/calculations) a. ALIF Sdn Bhd has operating income (EBIT) of RM10 million. The company's depreciation expense is RM2.7 million. ALIF is 100% equity financed, and current tax is 30%. i. What is ALIF's net income? (3 marks) ii. What is its net cash flow? (3 marks) b. Zorro Sdn Bhd has the following information: 2021 60:40 12 5 40 Capital Structure (Equity:Debt) Cost of equity Cost of Debt Number of shares in million Book value of equity in million EBIT in million Tax Rate Total Supplied Capital in million Price per share 2020 50:50 10 5 40 RM250 290 20% RM1,800 RM10 RM200 260 20% RM1,500 RM13 1 Zorro's management seeks your help to advice on the value created in the year 2020 and 2021. Calculate i. Market Value of equity (2 marks) Market Value Added (2 marks) 11. ini. Net Operating Profit After Tax (NOPAT) (2 marks) iv. Cost of capital (in RM) (6 marks) V. Economic Value added (EVA) (4 marks) vi Comment whether the company has created value to shareholders