QUESTION 5 FazzPrint Bhd is currently involves in printing and advertising business and is considering to expand its business by setting up a new branch in Kelantan. The initial costs amounting to RM600,000 including the cost of buying relevant machineries and equipments is estimated to be incurred. It is expected to generate annual profit before tax and depreciation of RM200,000 for the first two years and increase by 50% for the next three years. The desired internal rate of return is 22% and the desired payback period is 4 years. The cost of capital of the company is 10% and tax rate is 25%. Discount factors table are as follows: Year/percent 1 2 3 4 5 10% 0.9091 0.8264 0.7513 0.6830 0.6209 24% 0.8065 0.6504 0.5245 0.4230 0.3411 Required: a. Compute the projected Net Present Value (NPV) and the internal rate of retum (IRR). (Round up the answer to two decimal places). (12 marks) Compute the discounted payback period for the new branch. (Round up the answer to two decimal places). (4 marks) b. C. Discuss whether the company should proceed with the new project or not. (2 marks) d. State two (2) disadvantages of using accounting profits as compared to cash flow. (2 marks) (Total: 20 marks)