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Question 5 (a) Mr. Bala Krishnan, the finance manager of Butterflea Corporation found out that Shirty Berhad is a good opportunity to own and acquire

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Question 5 (a) Mr. Bala Krishnan, the finance manager of Butterflea Corporation found out that Shirty Berhad is a good opportunity to own and acquire the business. Due to misleading of management, Shirty Berhad laid off more than 100 staffs and incurred high turnover of workers for the last 2 years. The company receive abundance of speculations and rumors regarding the spread news in the social media about the scandal of the CEO. Due to this circumstance, lead the company being boycotted and continuously going bankrupt. Mr. Bala believe that will Shirty able to grow better if the management is wise and responsible towards the business. Therefore, Mr. Bala would like to propose the project to acquire Shirty or merge with company to the CEO and board of director of Butterflea Corporation. Based on the given case, identify the process involved and evaluate the proposal made by Mr. Bala Krishnan. (10 marks) (b) Syukurlah Corporation currently is looking for a business opportunity which requires an initial outlay of RM100,00. Ms Zetty, the finance manager of company has identified that there are two types of production she can propose to the board of directors: either the production of face masks or Muslim attires. The expected cash inflows for face mask production are RM45,000 annually for 5 years while Muslim attires is RM62,000 yearly for 3 years respectively. The required rate of return for these projects is 12 percent. By using three capital budgeting techniques, evaluate the best project for Syukurlah Corporation to invest and justify your answer. (15 marks) [25 Mark]

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