QUESTION 3 (CLO 3) a) Berjaya Company trying to decide which project should be taken out of three possible investments. The initial investment for all the project is RM 22 000 and the cost of capital is 10% each. Calculate the payback period for each of project listed below. Year 1 2 3 4 5 6 Project A 3000 4 000 8 000 12 000 9 000 10 000 Project B 9 000 10 000 13 000 8 000 Project C 10 000 10 000 13 000 b) Premium Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windwill power farm. The costs and cash flows from these systems are shown below. If the company uses a 12 percent discount rate for all projects, identify the forklift system should be purchased using the Net Present Value (NPV) approach. Justify your answer. Year Otis Forklifts (RM) Craigmore Forklift (RM) 0 3123450 4137410 979225 875236 1358886 1765225 3 2111497 2865110 1 2