Question 4 Handsome Ltd is considering a project with the following cash flows:

Year Cost of Plant Running costs Savings

RM RM RM

2020 (1,280,000)

2021 480,000 840,000

2022 550,000 980,000

2023 670,000 1,120,000

2024 890,000 1,400,000

Required:

a. Appraise the viability of the proposed project using the Net Present Value method of investment appraisal.

b. State with reasons if the project is worthwhile. (15 marks)