(Question 5) (a) The motives for holding cash is simple, the cash inflows and outflows are not well synchronized, for instance, sometimes the cash inflows are more than the cash outflows while at other times the cash outflows could be more. Hence, the cash is held by the firms to meet the certain as well as uncertain situations. Discuss the statement above. (6 marks) (b) Dividends are a company's way of sharing their profits with investors who stay put with their investments over a considerable period of time. Dividends are a reliable source of income for many investors and are offered by various instruments like bonds, shares, mutual funds, and other securities. They also hold a special place in an investors' portfolio for being highly tax efficient. There are various types of dividends that a company can pay to its shareholders. Briefly explain on the types of dividend payment. (8 marks) Mudajaya Berhad is evaluating two projects, Sinar and Teguh. The costs and cash flows for both projects are shown below: Sinar Teguh RM3,250,00 Initial outlay RM2,500,000 Cash flows RM375,000 RM450,000 Years 12 12 Required rate of return 10% 8% Based on the information above, calculate the following for both projects: i. Payback Period. (3 marks) ii. (6 marks) (2 marks) 25 marks Net Present Value. Profitability Index