QUESTION 3 Malu Jaya Corporation's return on net operating assets (RNOA) is 8%, with an effective interest rate of 25%. Its net operating assets (NOA) are RM4 million and are equally financed by common stock and 6% preference stock. The company's management plans to purchase sophisticated equipment valued at RM2 million that can boost production due to the increasing demand for the company's products. An increase of 2% in the company's RNOA is anticipated if the plan is implemented. There are two options available to finance the acquisition of the equipment. Option 1: Issue RM2 million of common stock. Option 2: Issue RM1 million bonds with a 10% coupon and RM1 million bommon stock. Required: i. Calculate net operating profits after tax (NOPAT) for both options. ii. Net income for each financing option. iii. Return on common equity (ROCE) for each financing option by using the ending equity approach. iv. Disaggregate ROCE into its operating margin, net operating assets turnover, and financial leverage components. (Assume sales for the year is RM1,500,000)