Question 5 My Teksi operates an online taxi booking services. As a result of technical advances in technology, the existing servers will have to be replaced. The company decided to come up with 2 competing projects. Project A is a booking service via the web and while the Project B is a booking service via mobile apps. The company wanted the cashflow of both projects to be tracked separately. A different technical consultant is hired at a cost of RM 80,000 for each project at the start of the project in 2020. The details of each system are as follows: Project A Project B RM RM Initial Investment 600,000 800,000 Residual Value 60,000 50,000 Contribution per annum 580,000 600,000 40,000 Fixed maintenance costs per annum Other fixed operating costs per annum 20,000 360,000 305,000 Estimated Useful life 3 years 5 years The maintenance costs are payable annually in advance. All other cash flows apart from the initial investment should be assumed to occur at end of each year. Depreciation has been calculated using the straight-line method and has been included in other fixed operating costs. All excess cash will be sent to the current account of the holding company. The company will loan the cash funds from their current account if there is any shortfall of cash for the year. At end of each year, the project will have no cash balances. Required: a) Prepare a separate cash budget each of the projects covering from year 2020 - 2025. (20 marks) b) A senior executive argued that all projects must show profits and if there is a profit, then you will have positive cashflow regardless. Evaluate whether you agree with him and justify your reasons. (5marks) Total (25marks)