Question Chapter Capital Budgeting: PT1 The Xoxo Company is considering on the below projects. The cash flows associated with those projects are as follows: Year 0 1 2 3 4 Project 1 (RM) (120,000) 65,000 65,000 65,000 Project 2 (RM) (100,000) 22,500 22,500 22,500 22,500 22,500 22,500 22,500 0 5 0 6 0 7 0 8 9 0 0 22,500 Assume the Required Rate of Return is 14%. Solve it using NPV & Pl methods. Question Chapter Bonds: PT2 Given below is information about three RM1000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 10%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years) 1 2 3 6 10 14 10 15 20 Question Chapter Capital Structure : PT3 City Engineering Berhad is financed entirely with 1,600,000 shares of ordinary stocks priced at RM5 per unit and RM3,200,000 worth of bonds at 8% for 10 years. The company plans to raise an additional RM4,000,000 to finance new project and considering 2 alternatives : Alternative 1 : Issue 10% bond. Alternatives 2 : 500,000 units new common shares sold to the public. Corporate tax at 28% If the EBIT is expected to be at RM3,000,000, which plan will result in a higher EPS