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QUESTION 2 Quto Sdn Bhd is considering one of the two mutually exclusive projects, AB and CD. The company's discount rate is at 10 percent.
QUESTION 2 Quto Sdn Bhd is considering one of the two mutually exclusive projects, AB and CD. The company's discount rate is at 10 percent. The expected after-tax cash flows for both projects are as follows: Yea r 0 CD (RM) (17,000 1 2 3 4 5 AB (RM) (10,00 0) 1,500 2,000 2,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 As the company's financial manager, you are required to: i) Calculate the payback back period for project AB and CD. (4 marks) ii) Calculate the Net Present Value for project AB and CD. (8 marks) iii)Determine the best project that Quto Sdn Bhd should invest into. Justify your answer. (4 marks) b) Explain any two (2) criteria that should be considered in making decision under capital budgeting. (4 marks) (Total 20 marks)
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